India delays digital payments fee rollout amid retailer pushback
The NPCI, which operates the UPI network, said it was postponing the planned October 15 rollout of the 0.4% fee due to the festive shopping season.
India has postponed its plan to introduce a 0.4% merchant fee on digital payments through its Unified Payments Interface (UPI) network, following widespread opposition from merchants across the country. The National Payments Corporation of India (NPCI), which manages UPI, announced the delay on Tuesday, citing the upcoming Diwali festival shopping season.
The fee, initially proposed for transactions exceeding ₹2,000 ($21), was set to take effect on October 15, but will now be implemented after Diwali, though the exact date has not been specified. Although UPI has processed 24.07 billion transactions worth ₹29.37 trillion ($305 billion) in September alone, the proposed fee would mark a significant shift from India's long-standing policy of free UPI payments for merchants.
The fee drew criticism from retailers and petrol pump operators, who warned they might abandon UPI payments if the charge were to take effect. UPI, supported by the government's free merchant policy and subsidies to banks and payment providers, has grown in transaction volume and value in recent years. In response to the fee opposition, NPCI proposed exemptions for transactions of ₹2,000 or less and for small merchants handling less than ₹100,000 ($1,033) per month through UPI.
The organization also capped the fee at ₹300 ($3) for larger transactions and pledged to share the collected revenue among UPI ecosystem participants to support infrastructure, cybersecurity, and fraud prevention.
Written by urgent.news from TechCrunch's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
