The proposed 0.4% fee on certain UPI payments has been postponed until after Diwali, giving relief to merchants during the festive shopping season. The National Payments Corporation of India (NPCI) has said the revised implementation date will be announced separately. The fee was earlier scheduled to begin on October 15, 2026. <Cite refs={["turn175622news20","turn175622search2"]}/>
Under the proposed rules, eligible payments made by customers directly to merchants above ₹2,000 will attract a Merchant Discount Rate (MDR) of 0.4%, capped at ₹300 per transaction. The charge will be paid by the merchant, not the customer.
For example, on a purchase worth ₹3,000, the merchant’s fee would be ₹12. However, the rules exclude person-to-person transfers, payments of up to ₹2,000 and eligible small merchants receiving up to ₹1 lakh per month through UPI QR payments. <Cite refs={["turn175622search0","turn175622search4"]}/>
The proposed fee cannot be passed on to customers. If a shopkeeper demands an extra amount specifically as a UPI charge, customers should check the applicable rules and raise the issue with the relevant payment provider.
For now, customers can continue using UPI as usual during the festive season. Merchants and payment providers will need to watch for NPCI’s announcement of the new date. The postponement has brought temporary relief, but the final rollout date remains unconfirmed.
