India considers delaying UPI payment fee rollout

Business Recorder reported, citing a regulatory official and an industry executive, that India is weighing a delay of a few months to its planned charge on large UPI transactions. The 0.4 percent levy on merchants for payments above 2,000 rupees was announced last month, ending more than six years of free transactions, and it has drawn complaints from shopkeepers and a major brokerage.

The charge had been scheduled to take effect on October 15, a date that would have overlapped the festive season from October to December, a period typically marked by heavier consumer spending. The National Payments Corporation of India has yet to take a final decision on the postponement, but a decision is anticipated shortly, one source said. According to the sources, a later start would let payments firms upgrade their systems without passing costs on to customers, and January has been floated as a possible new start.

UPI serves more than 500 million users, and PhonePe and Google Pay together held roughly 80 percent of transaction value in August. Shares of Indian digital payments companies fell on Thursday, with Paytm down 5.5 percent, Mobikwik off 7 percent and Pine Labs lower by 3 percent, as those firms stood to gain from the charge. The likely postponement was first flagged by Moneycontrol, while the NPCI did not respond to an email seeking comment.