Small merchants will ditch UPI

Tiered just doesn't help if you want to encourage growth...it caps growth. Only very few large merchants will pay who already pay for debit or credit cards. Many of them pay for UPI anyhow as gateways charge a platform fee.

Banks are paid by float for all payments including neft, cheques and cash atm, all of which are free for small amounts and UPI is defined as a small amount. When float income stops then it makes sense to think of charging for upi.