India postpones proposed UPI merchant fee until after Diwali
Trade groups warn of potential impact on festive spending.
India has delayed the introduction of a fee on certain digital payments made to merchants until after Diwali, following concerns that the new charge could affect spending during the festive season.
The National Payments Corporation of India (NPCI), which operates the Unified Payments Interface (UPI), announced the decision in a statement today (13 October).
It said the fee would take effect after Diwali, with a revised implementation date to be announced separately.
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The 0.4% Merchant Discount Rate (MDR) on specified merchant transactions exceeding Rs2,000 was announced on 15 September and was scheduled to take effect on 15 October.
Under the proposed framework, businesses receiving the payments would bear the fee, rather than customers making the transactions.
The introduction of the charge would mark a departure from more than six years of zero-MDR UPI payments, although most transactions would remain free under the new rules.
The postponement follows criticism from trade groups, which raised concerns about the potential impact of the fee on consumer spending during Diwali, the Hindu festival of lights, which falls early next month.
UPI has become a widely used payment system in India, with more than 500 million people relying on it for purchases ranging from everyday goods to high-value transactions.
