The Centre may reportedly postpone implementing a new fee on higher-value transactions made through the Unified Payments Interface (UPI), with a final decision expected soon. The proposed charge was originally scheduled to take effect from October 15. However, concerns around the timing of the rollout, particularly as the festive shopping season gets underway, have prompted discussions about pushing the implementation back by a few months.
The National Payments Corporation of India (NPCI), which operates the UPI network, is yet to make a final decision on whether the new fee will be delayed. An announcement could come in the next few days, according to a Reuters report citing people familiar with the discussions.
The proposed change marks a major shift for India’s digital payments ecosystem, which has operated with zero-cost UPI transactions for more than six years.
If the proposal is deferred, the charge could instead be introduced in January, the report added.
The proposed fee is a 0.4 per cent charge on merchants for UPI transactions above Rs 2,000. The move has already faced resistance from retailers as well as at least one major brokerage.
A postponement would give payment companies additional time to modify their systems and prepare merchants for the new pricing structure. It could also prevent the additional cost from being passed on to consumers during one of the busiest spending periods of the year.
Festive Season Raises Timing Concerns
The October-December period is traditionally one of the strongest consumption seasons in India, with spending rising around major festivals and the shopping events associated with them. The October 15 implementation date would have come just as this period was gathering momentum. Industry participants have therefore raised concerns about introducing an additional transaction cost at a time when merchants and consumers are already handling elevated payment volumes.
UPI has become deeply embedded in India’s daily economy, with more than 500 million users relying on the platform for transactions ranging from small purchases at roadside stalls to high-value purchases such as smartphones.
PhonePe, Google Pay and other major payment platforms account for a significant share of the country’s UPI activity. PhonePe and Google Pay together held roughly 80 per cent of UPI transaction value in August.
Digital Payment Stocks Under Pressure
The possibility of delaying the fee rollout also weighed on shares of listed digital payment companies on Thursday.
Paytm shares fell 5.5 per cent, while Mobikwik declined 7 per cent. Pine Labs also came under pressure, with its stock falling 3 per cent.
The proposed fee had been viewed as potentially beneficial for payment companies, making the prospect of a delay negative for investor sentiment around the sector.
However, the broader impact will depend on how the final framework is implemented and whether payment companies ultimately absorb the cost or pass some portion of it on to merchants or consumers.
The proposed delay remains under discussion, and no final decision has been taken by NPCI at the time of reporting, as per the report.
Times Now Digital has reached out to NPCI for a response. The story will be updated once a response is received.
