[m_km]

Indian here. One thing you should remember is that UPI is free (so far) because it is not a 'Credit' product yet. With a credit card, someone is giving you a loan for x days and there are costs associated with it - interest rates, default rates, etc.

Of the 2.9% that Stripe (or any other processor) charges, a majority of the fee goes to the credit card issuer, i.e. bank. You probably chose to use a particular credit card because of the rewards offered by that particular bank. So, practically, a majority of the 2.9% fees goes to the issuing bank and a major portion is returned as rewards to the credit card user, i.e. the payer. Since the merchant, i.e. the seller, probably raised the prices by ~3% in order to afford the processing fees and credit card users get back most of it in rewards, people that use any other mode of payment end-up paying extra for the same product practically.

'Credit' cards are going to cost money for the foreseeable future. Issuing banks charge anywhere from 1.8% to 3% or higher for processing credit their cards. Processors add a markup on top of this fees to their merchants. 'Debit' cards issued by the major banks on the other hand, cost less than 0.5% for the processors. Stripe charges 2.9% for both debit as well as credit cards, YES but their costs to them are not the same.