Centre postpones rollout of UPI payments fee above Rs 2,000 to after Diwali

The 0.4% fee on Unified Payments Interface transactions above Rs 2,000 to merchants will be imposed after the Hindu festival of Diwali, which will be celebrated on November 8 this year, said the National Payments Corporation of India on Tuesday.

The corporation is an umbrella body of retail payments and settlement systems operating under the Reserve Bank of India.

On September 14 and September 15, the Ministry of Finance issued notifications stating that UPI payments to merchants valued above Rs 2,000 would attract a merchant discount rate of 0.4%.

A merchant discount rate is a fee charged to businesses by banks to cover the costs of processing transactions. The rate typically ranges from 1% to 3% of the transaction value for credit card payments and can be up to 0.9% for debit card transactions.

On September 28, the Union government said that the charges would take effect on October 15.

The National Payments Corporation of India said on Tuesday that the decision to defer the implementation of the charges was taken “keeping in mind the festive season”.

Opposition to the charges

In September, a petition had been filed before the Supreme Court that said that businesses may pass on the additional cost of the UPI charges to consumers.

Additional Solicitor General N Venkataraman, appearing for the Union government, had submitted before the...

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