Overview
- Reports say the UPI Steering Committee agreed in September to a 0.4% merchant discount rate for person-to-merchant payments above ₹2,000, with some coverage noting a per-transaction cap.
- The planned rollout has become uncertain after a scheduled Steering Committee meeting did not take place and the National Payments Corporation of India has not announced a new date, with sources saying NPCI is weighing a deferral to January 2027.
- Merchant groups, led by the Kerala Textile & Garments Association, warn the charge would cut thin retailer margins (often 1–5%), push traders toward cash, and lead merchants to raise prices for consumers.
- KTGA proposes that UPI’s estimated annual operating cost of ₹20,000–25,000 crore be funded from government revenues via bodies such as the GST Council and the tax authority rather than by charging merchants.
- The payments industry is split—some executives back the original schedule while others seek more time and clarity—and the Finance Minister has said ecosystem stakeholders should decide how the fee is implemented.