India delays selected UPI merchant fees until after Diwali

The National Payments Corporation of India has deferred the introduction of merchant discount rate fees on selected UPI payments to merchants until after Diwali. A precise date will be announced separately, NPCI said on October 13.

The UPI and Services Steering Committee made the decision with the festive season in mind. Implementation had previously been scheduled for October 15. The delay concerns person-to-merchant payments, rather than every type of UPI transaction.

The framework provides for a 0.4% fee on eligible payments exceeding 2,000 rupees. Person-to-person payments remain free. Postponing implementation does not cancel the fee or introduce a charge on every small purchase.

Reserve Bank of India Governor Sanjay Malhotra said on October 7 that, in his view, a small fee would not significantly affect UPI transaction volumes. That is an assessment of likely effects, rather than evidence from operations after the new rules take effect.