India's National Payments Corporation of India (NPCI) has delayed the introduction of a merchant fee on UPI transactions, originally scheduled for October 15, until after the Diwali festival. The proposed 0.4% charge on eligible transactions above ₹2,000 would mark a significant departure from the government's policy of keeping UPI free for merchants since January 2020.
The postponement follows broad opposition from retailers and petrol pump operators, some of whom warned they might stop accepting UPI if the fee took effect. NPCI cited the festive shopping season as the reason for the delay, without specifying a new date. UPI processed 24.07 billion transactions worth about ₹29.37 trillion in September alone.
The fee would have exempted payments up to ₹2,000 and small merchants receiving less than ₹100,000 per month, with a cap of ₹300 on larger transactions. NPCI said the collected funds would support infrastructure, cybersecurity, and fraud prevention, addressing industry concerns about the roughly ₹200 billion annual cost of running UPI.