New Delhi, May 19 -- Scanning that UPI code to make a purchase may become cheaper than swiping your credit card, if a consumer affairs ministry effort on payment transaction fees bears fruit.

The government is working on a plan that will pass on the cost benefits of its popular unified payments interface (UPI) to consumers and incentivize its use in one go, three people familiar with the discussions said. Ministry officials will soon meet industry stakeholders to take the plan forward, one of the three people said on the condition of anonymity.

Every time a credit card is swiped, the merchant pays a fee of 2-3% to the bank and a payment gateway such as Visa or MasterCard, called the merchant discount rate (MDR). Most merchants do not pa...