India's UPI fee faces retailer, broker pushback

Business Recorder reported that retail and trade bodies in India have criticised New Delhi's decision to levy a fee on some merchant payments made through the Unified Payments Interface, warning it could squeeze margins before the festive season. The National Payments Corporation said on Tuesday that merchants will pay 0.4% on transactions above 2,000 rupees ($20), a change that brings an end to a free arrangement lasting over six years. The federal government and the central bank have backed the move.

The Retailers Association of India said on Wednesday that the charge might push shopkeepers toward cash, just as festive spending in October and November usually picks up. Its chief executive, Kumar Rajagopalan, argued that many seasonal purchases cross the 2,000 rupee threshold, making cash the simplest route for merchants with slim profits. The Clothing Manufacturers Association of India, speaking through president Santosh Katariya, called the timing poor because consumer businesses are attempting to restore demand and margins.

A public-interest petition has reached the Supreme Court, where a lawyer seeks a suspension of the framework on grounds that it lacked adequate legal authority and safeguards. Separately, capital-market payments to brokers, mutual funds and securities dealers will carry a 0.02% fee capped at 300 rupees, which Zerodha chief Nithin Kamath said could strain brokerage economics. He wrote on X that he could not see how brokers would keep absorbing the added cost.