New timeline follows retailer concerns
India's National Payments Corporation of India (NPCI) has postponed the planned introduction of a fee on some transactions made through its Unified Payments Interface (UPI). The change, initially scheduled for October 15, will take effect after Diwali; NPCI has not announced a new date.
The proposed charge is 0.4% on eligible merchant transactions above ₹2,000. Payments of ₹2,000 or less would remain exempt, as would small merchants receiving less than ₹100,000 a month through UPI. The fee would also be capped at ₹300 for larger transactions.
Retailers and petrol pump operators had raised concerns about the plan, with some saying they might stop accepting UPI payments if the charge began during the busy festive shopping period.
Balancing costs and access
UPI has become a central part of India's digital payments landscape, enabling transactions through services including Google Pay, PhonePe and Paytm. Merchants have generally been able to accept UPI payments without a transaction fee since the government removed such charges in 2020 to encourage a shift from cash.
NPCI says running the network costs an estimated ₹200 billion annually, covering areas such as servers, technical support and fraud prevention. The proposed fee is intended to help fund the infrastructure and services behind the expanding system. In September, UPI recorded 24.07 billion transactions worth ₹29.37 trillion.
As digital payments continue to grow, the eventual rollout will test how India can support the network's long-term costs while keeping everyday transactions accessible to merchants and customers.
