Sri Vijaya Puram, Oct. 8: The proposed 0.4 per cent fee on large UPI merchant transactions may be delayed by a few months, with the October 15 rollout potentially pushed to January, as concerns grow over its implementation during India’s peak festive spending season, according to media reports.
A final decision on the proposed delay is yet to be taken by the National Payments Corporation of India (NPCI), with clarity expected in the coming days. The possible postponement would give payment companies more time to upgrade their systems and could help address concerns from retailers over additional costs during the October-December festive period.
India last month announced a 0.4 per cent charge on UPI transactions above Rs 2,000 made by merchants, ending more than six years of zero-cost payments. The proposed fee has faced opposition from retailers and a major brokerage.
The charge would affect one of India’s most widely used digital payment systems. UPI is used by more than 500 million people for transactions ranging from small everyday purchases to high-value consumer spending.
PhonePe, owned by Walmart, and Google Pay, owned by Alphabet, together accounted for about 80 per cent of UPI transaction value in August, underlining the scale of the payment platforms involved.
The proposed October 15 implementation would coincide with the annual festive season, when consumer spending typically rises. A delay could therefore allow payment firms and merchants to prepare for the new fee structure without introducing the change during the peak period.
According to media reports, the industry discussions could result in the fee coming into effect from January instead.
The uncertainty over the rollout also weighed on shares of listed digital payment companies on Thursday. Paytm fell 5.5 per cent, while MobiKwik declined 7 per cent and Pine Labs dropped 3 per cent.
The proposed fee marks a significant shift after years of zero-cost UPI payments. Its possible postponement leaves merchants and payment companies awaiting a final decision on when the new charge will take effect.
