India considers postponing UPI fee rollout on large payments

New Delhi: India is considering delaying the rollout of a fee on large payments via its popular Unified Payment Interface (UPI) platform by a few months, according to a regulatory official and an industry executive familiar with the discussions.

India last month ended a free UPI regime by permitting a 0.4% fee for merchants on transactions exceeding 2,000 rupees, which is equivalent to approximately US$21.

UPI is used by over 500 million people to pay for everything from roadside cups of tea to iPhones.

The fee, set to come into effect from Oct 15, would have coincided with India’s annual festive season that runs from October until December and typically sees a surge in consumer spending.

The likely delay would ensure retail payments are not impacted during the festive season and give the payments industry more time to prepare for the change, said the sources, requesting anonymity as the discussions are private.

An email to the National Payment Corp of India was not answered.

In addition, local media had first reported the likely delay.

Investors were viewing the fee as a key monetisation opportunity for payments providers, which were expected to get a share.

Stocks of Indian digital payments firms slid on Thursday on news of a delay.

Paytm declined 7.6% and One Mobikwik Systems slipped 7.2%. — Reuters