The proposed 0.4% levy on large merchant UPI transactions could be delayed from 15 October until January, giving banks and payment firms more time to prepare.
India is weighing a short delay to the launch of fees on large Unified Payments Interface transactions, a move that would give banks and payment firms more time to prepare and avoid disruption during the country’s busiest shopping period, according to Reuters and local business media.
The proposed charge, introduced last month after more than six years of zero-cost UPI payments, would impose a 0.4% fee on merchant transactions above 2,000 rupees, or about $21. Consumers would remain exempt. The plan was due to take effect on October 15, but people familiar with the discussions told Reuters that the National Payments Corporation of India has not yet made a final decision and could defer the rollout by a few months.
A delay would likely push implementation into January, according to industry sources quoted by Reuters and corroborated by Livemint, Times of India and Outlook Money. Those reports said the pause would allow payment companies to upgrade systems and give merchants, banks and processors more time to adjust before the festive season, which typically runs from October through December and usually drives a sharp rise in spending.
UPI has become central to daily commerce in India, with more than 500 million users making purchases ranging from tea to smartphones, Reuters reported. The market is also highly concentrated: Walmart’s PhonePe and Alphabet’s Google Pay accounted for about 80% of UPI transaction value in August, according to Reuters.
The prospect of the fee has already unsettled investors. Reuters reported that shares in Paytm, MobiKwik and Pine Labs fell after the planned charge was announced, reflecting expectations that payment firms would benefit if the levy goes ahead. Moneycontrol was the first to report that the rollout may be delayed.
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