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India Moves To Create A Sustainable Business Model For UPI

by News Editor

August 4, 2026

India is preparing the ground for a major shift in the way its Unified Payments Interface (UPI) is funded, with new legislation opening the door to merchant fees on certain transactions after years of operating under a zero-fee model.

While the proposed law does not introduce charges immediately, it creates the legal framework for future changes. Details, including which transactions could be affected, are expected to be determined at a later stage.

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A Turning Point For UPI

Since 2020, merchants have been able to accept UPI payments without paying merchant discount rates (MDR), helping the government rapidly expand the country’s digital payments ecosystem. Instead, the network has relied on state support to cover operational costs and encourage adoption.

That model is now facing growing pressure. As transaction volumes continue to climb, banks and fintech companies have argued that maintaining and expanding the infrastructure requires a more sustainable source of funding.

UPI processed a record 23.66 billion transactions worth ₹29.88 trillion (approximately $313.4 billion) in July, according to the National Payments Corporation of India (NPCI).

Merchant Fees Under Consideration

The legislation does not specify whether merchant charges will be introduced or how they would be structured. However, reports suggest policymakers are considering limiting any future fees to larger businesses rather than applying them across all merchants.

Industry leaders have welcomed the possibility of recovering part of the costs associated with technology, cybersecurity and product development, while keeping person-to-person payments free for consumers.

A New Revenue Opportunity

Analysts believe the proposal could unlock a significant new revenue stream for India’s payments industry. Investment bank Jefferies estimates that introducing merchant fees on higher-value UPI transactions could generate between ₹50 billion and ₹100 billion in annual revenue by the 2028 fiscal year.

According to brokerage firm Bernstein, transactions above ₹2,000 represent only a small share of total payment volumes but account for the majority of transaction value, making them a potential focus for any future pricing model.

Global Implications

The proposed changes will also be closely watched outside India as UPI continues to expand internationally. The payments network is already available in markets including Singapore, the United Arab Emirates and France.

Any future charging model could have significant implications for major payment providers such as PhonePe and Google Pay, although the impact will ultimately depend on how potential merchant fees are shared across banks, payment platforms and other participants in the ecosystem.

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Shein Targets $25 Billion Valuation In Hong Kong IPO As Growth Slows

by News Editor

August 17, 2026

Shein is reportedly targeting a valuation of around $25 billion in its planned Hong Kong IPO, a sharp decline from the nearly $100 billion valuation the online fashion retailer achieved in a 2022 fundraising round.

Two people familiar with the plans said the company was likely to target about $25 billion, while another source put the expected range at $25 billion to $28 billion based on the proposed price band.

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IPO Valuation Falls Sharply

Shein plans to sell up to 8% of its shares in the offering, according to a person familiar with the plans. At a $25 billion valuation, that would translate into an IPO of as much as $2 billion.

The latest target is also below the $30 billion to $40 billion valuation the company was seeking earlier this month as it began meeting with potential investors.

Founded in China in 2012 and now headquartered in Singapore, Shein sells low-cost clothing to consumers in about 160 countries. The company is expected to launch its long-awaited Hong Kong IPO later this week.

Trade Restrictions Weigh On Growth

Shein’s valuation has come under pressure as major markets tighten rules affecting low-cost e-commerce shipments. The European Union, for example, has moved to impose additional fees on cheap parcels from platforms such as Shein and Temu. EU Tightens Rules On Low-Cost E-Commerce Parcels

In the U.S., the removal of an import duty exemption for small packages has also affected the company. Shein reported a $99 million quarterly loss in the first quarter of 2026 as sales growth slowed, while a one-time accounting charge further weighed on its results. Shein Reports First-Quarter Loss Ahead Of IPO

Investors Question Shein’s Growth Prospects

The steep reduction in valuation reflects growing concerns over slower growth, higher trade costs, regulatory pressure and stronger competition across global e-commerce.

Some investors who reviewed Shein’s recent financial statements or attended IPO presentations told Reuters they were skeptical that the company could return to the growth rates that supported its $98.2 billion valuation in 2022. Shein’s Slowing Growth Tests Investor Appetite

A lower IPO valuation could also affect Shein’s existing investors. Under the terms of its IPO filing, the company may have to issue additional shares to certain pre-IPO investors if its valuation falls below agreed thresholds.