India delays UPI merchant-fee rollout after retailer pushback
The fee change will not start before Diwali, leaving merchants with the current free model in place for now.
India has pushed back a planned merchant-fee change for UPI, the payments rail used by Google Pay, PhonePe and Paytm, after merchants objected and the festive season made a near-term launch awkward. The National Payments Corporation of India had set October 15 for a 0.4% charge on eligible merchant payments above ₹2,000, but now says the rollout will happen only after Diwali, with no fresh date given. The move matters because UPI has remained free for merchants since the government removed such fees in January 2020, and the network handled 24.07 billion transactions worth ₹29.37 trillion in September alone. NPCI says the industry-wide system costs about ₹200 billion a year to run and the new fee was meant to help fund infrastructure, cybersecurity and fraud prevention.
Why it matters
For merchants, the delay extends a payment setup they have used without merchant fees since January 2020. For UPI’s operators, it also pushes back a revenue step that was intended to help cover the system’s roughly ₹200 billion annual running cost while handling very large transaction volumes.
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Sources
- TechCrunch