New Delhi: India is considering delaying the implementation of a new fee on high-value merchant payments through the Unified Payments Interface (UPI) by a few months, according to a regulatory official and an industry executive familiar with the discussions.
The proposed delay could shift the rollout from October 15, 2026, to January 2027, giving payment companies more time to upgrade their systems and helping retailers prepare for the change during the festive shopping season. However, a final decision by the National Payments Corporation of India (NPCI) is still pending.
New 0.4% Fee on Large UPI Payments
India recently announced a 0.4% fee on merchant transactions exceeding Rs 2,000, ending more than six years of zero-cost payments under the existing arrangement, according to the report.
The proposed charge has faced opposition from retailers and a major brokerage firm, raising concerns about the potential impact on businesses and digital payment costs.
UPI has become one of India’s most widely used digital payment systems, with more than 500 million users making payments ranging from small everyday purchases to expensive electronics.
Festive Season Behind Possible Delay
The planned October 15 implementation would coincide with India’s festive shopping period, which generally runs from October to December and sees a significant increase in consumer spending.
According to people familiar with the discussions, postponing the fee could give payment service providers time to update their systems and address operational challenges for merchants.
The delay could also help payment companies avoid passing additional costs on to customers during the busy festive season. The industry executive cited in the report said the fee could come into effect in January if the postponement is approved.
NPCI Yet to Make Final Decision
The NPCI, which oversees UPI operations, has not yet announced a final decision on the proposed delay. A decision is expected in the coming days, according to one of the sources quoted in the report.
The development follows concerns raised by retailers and other industry participants after the fee was announced. The final implementation timeline will determine when the new charge takes effect.
Digital Payments Stocks Decline
Shares of several Indian digital payments companies fell on Thursday amid developments surrounding the proposed fee.
According to the report, Paytm shares declined 5.5%, Mobikwik fell 7%, and Pine Labs dropped 3%. These companies could benefit from the proposed charge, although the timing and final terms of implementation remain uncertain.
The proposed UPI fee is being closely watched by payment companies, merchants and consumers because of the platform’s significant role in India’s digital economy.
