India Postpones UPI Merchant Fees After Retailer Resistance

The NPCI move arrives amid intense pressure from merchants and petrol pump operators, some of whom threatened to boycott the Unified Payments Interface entirely if the new costs were implemented. The fee structure, announced last month, was intended to help banks and payment providers like Google Pay and PhonePe recoup the estimated ₹200 billion in annual infrastructure and cybersecurity costs required to maintain the network.

While the government previously subsidized these costs to accelerate the national shift away from cash, the ecosystem has struggled under the weight of its own success. In September alone, UPI processed 24.07 billion transactions worth ₹29.37 trillion. By exempting transactions under ₹2,000 and small merchants with monthly receipts below ₹100,000, the NPCI had hoped to soften the blow for smaller players. The agency has yet to announce a firm date for when these fees will eventually take effect.