Following broad pushback from merchants across the country, India has delayed plans to introduce merchant fees on its digital payments network. This initiative aimed to make the business more lucrative for the companies that facilitate the payments service, which has long been dominated by Google and PhonePe.
Delay Announcement
The National Payments Corporation of India (NPCI), which operates the country’s Unified Payments Interface (UPI), announced on Tuesday that it was postponing the planned rollout of a 0.4% fee on eligible merchant transactions exceeding ₹2,000 (about $21). The rollout was originally scheduled for October 15 but has been delayed due to the upcoming festive shopping season.
Context of the Fee
The proposed fee, announced last month, represents a significant departure from India’s long-standing policy of keeping UPI payments free for merchants. The NPCI has stated that the rollout will now take place after Diwali, one of India’s biggest festivals and shopping periods, although a new date has not been specified.
In September alone, UPI processed 24.07 billion transactions worth ₹29.37 trillion (about $305 billion), according to NPCI data. The proposed fee faced strong opposition from retailers and petrol pump operators, with some warning they might stop accepting UPI payments if the charge were implemented.
