On Tuesday, the UPI and Services Steering Committee voted to postpone the 0.4% merchant discount rate, initially slated for October 15, until after the Diwali rush, slated for the second week of November.
The rate applies only to person‑to‑merchant UPI transactions over ₹2,000, equating to ₹8 per ₹2,000 or ₹40 per ₹10,000. Certain high‑value sectors—railways, telecom, insurance, fuel and ag inputs—will pay a flat ₹5 fee.
Central Finance Ministry says UPI’s annual operating cost is about ₹20,000 crore, and the fee is meant to cover infrastructure, cybersecurity and fraud prevention. Merchants will bear the cost, capped at ₹300 for transactions above ₹75,000, while person‑to‑person transfers remain free.
Small shop owner Ramesh from Jaipur worries that the new charge could force him to raise prices. He and other merchants are using the extra week to tweak their point‑of‑sale systems. NPCI will issue a formal notification next week, after which merchants must comply.