Key Takeaways
- India is considering delaying the implementation of a fee on large UPI transactions.
- The fee, set to start on October 15, would apply to transactions over 2,000 rupees.
- The delay aims to avoid impacting retail payments during the festive season.
India is reportedly considering postponing the implementation of a fee on large Unified Payment Interface (UPI) transactions by a few months, according to sources familiar with the discussions.
The fee, which was set to come into effect from October 15, would apply to transactions exceeding 2,000 rupees, amounting to 0.4% of the transaction value. This fee was intended to replace the previous free UPI regime.
The proposed delay is aimed at ensuring that retail payments are not disrupted during the festive season, which typically runs from October to December and sees a significant increase in consumer spending.
Sources, who requested anonymity due to the private nature of the discussions, stated that the delay would provide the payments industry more time to prepare for the change. The fee was seen as a key monetisation opportunity for payments providers, which were expected to receive a share of the revenue.
Local media first reported the likely delay, leading to a decline in the stocks of digital payments firms. Paytm saw a 7.6% drop, while One Mobikwik Systems slipped 7.2% on Thursday.
The National Payment Corporation of India (NPCI) did not respond to an email seeking comment.
Industry insiders believe that the delay will help in managing the transition smoothly and ensuring that the festive season remains unaffected by the new fee structure.
The UPI platform is used by over 500 million people for various transactions, ranging from small purchases like roadside tea to larger items such as iPhones.
