UPI payment fee rollout may be delayed until January: Report

India is considering delaying by a few months the rollout of a fee on large payments made through its popular Unified Payments Interface (UPI), according to a regulatory official and an industry executive familiar with the discussions who spoke to Reuters.

India last month ended more than six years of zero-cost payments by announcing a 0.4 per cent charge for merchants on transactions exceeding 2,000 rupees ($21). The move has drawn opposition from retailers and a large broker.

The new fee is due to come into effect from October 15. Its rollout would coincide with India’s annual festive season, which runs from October through December and typically brings a surge in consumer spending.

UPI is used by more than 500 million people to make payments for everything from roadside cups of tea to iPhones in Asia’s third-largest economy.

Walmart’s PhonePe and Alphabet’s GooglePay accounted for about 80 per cent of UPI transaction value in August.

A final decision on delaying the rollout has not yet been taken by the National Payments Corporation of India (NPCI), but one of the sources told Reuters that a decision is expected in the coming days.

The sources, who requested anonymity because the discussions are private, said a delay would give payments firms more time to upgrade their systems without passing the additional costs on to customers. It could also help address issues retailers may face during the festive period.

The industry executive said the fee could instead come into effect from January.

An email sent to the NPCI was not answered. Moneycontrol first reported the likely delay.

Shares of Indian digital payments companies fell on Thursday as these firms would benefit from the new charge. Paytm and Mobikwik dropped 5.5 per cent and 7 per cent, respectively, while Pine Labs slid 3 per cent.

(With inputs from Reuters)