India Delays UPI Payment Fee Rollout Until After Diwali
India has postponed the introduction of a fee on large transactions made through the Unified Payments Interface (UPI) until after the Diwali festival, the National Payments Corporation of India (NPCI) announced on Tuesday. The proposed 0.4% charge on merchant transactions exceeding ₹2,000 was originally scheduled to take effect on October 15. NPCI said the delay was intended to avoid disruptions during the festive season, with the revised implementation date to be announced separately.
Diwali, which falls on November 8 this year, is one of India’s busiest shopping periods, with consumers spending heavily on electronics, clothing, vehicles and household goods. The proposed fee would end more than six years of zero-cost UPI payments and has faced opposition from retailers. The Confederation of All India Traders welcomed the postponement, describing it as timely and pragmatic. Payment industry representatives said the additional time would help businesses upgrade their systems and prepare for the change.
UPI is used by more than 500 million people across India for everyday purchases and large payments alike. PhonePe and Google Pay accounted for around 80% of UPI transactions by value in August. Following the announcement, shares of Paytm, Pine Labs and One MobiKwik Systems rose by 1%, 1.8% and 1.3%, respectively. Industry analysts said the decision provides greater clarity for payment companies preparing for the merchant discount rate (MDR) fee’s eventual implementation.
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