According to the media reports, India may delay by months the rollout of a merchant discount rate (MDR) fee on large Unified Payments Interface (UPI) payments.
Reuters has reported based on the discussions among regulatory official and an industry executive familiar with the matter.
In August 2026, India ended decade old zero-cost payments by enacting Taxation and other laws (Amendment) Act 2026, authorising government to permit banks and other service providers to levy charges on payments made through the Unified Payments Interface (UPI) and other notified electronic payment modes.
The proposed levy of 0.4% is to charged by merchants on transactions exceeding 2,000 rupees.
The proposed fee drew opposition from retailers and a large broker.
UPI is used by over 50 crore people in India as a pocket wallet for purchasing anything from roadside cups of tea to iPhones. PhonePe and Google Pay had about 80% market share by value of UPI transactions in August.
The fee, which was supposed to be introduced from October 15, would have coincided with two celebrated annual festive season i.e., Dusshera and Diwali, from October to December. This season records the highest surge in consumer spending from all sections of the society.
However, final decision is still awaited. A final decision has yet to be taken by the National Payments Corporation of India but is expected in the coming days, one of the sources said to Reuters.
A delay in implementation would allow payments firms to upgrade systems and not pass on costs to customers, while addressing issues retailers may face during the festive period, the sources said, requesting anonymity as the discussions are private.
The fee could kick in from January, the industry executive said.
