UPI’S GROWING REACH
UPI has transformed the way Indians pay for goods and services, allowing users to transfer money instantly through a mobile app.
The platform is used by more than 500 million people and supports transactions ranging from small purchases at roadside stalls to larger retail spending.
NPCI has said the fees are needed to help cover the costs of maintaining the system, and the upcoming charges will be borne by merchants rather than consumers.
According to NPCI data, more than 24 billion transactions worth over US$300 billion were processed through UPI in September alone.
Around 95 per cent were below the 2,000-rupee threshold and would not have attracted the fee.
Still, retailers are concerned that the additional costs could affect their businesses, particularly as UPI has become the dominant mode of payment for many customers.
„Now, most of our customers make payments using UPI. Seventy per cent of them make UPI payments,“ said Shubham Dubey, owner of clothing store Mohini Collections, adding that the rest pay by cash or cards.
Asked how his business might respond once the fees are implemented, Dubey said he would suggest that customers make payments in cash.
Experts say retailers are likely to adopt different strategies depending on their business models and margins once the fees come into effect.
„Some will absorb the charge because accepting UPI helps them retain customers and complete sales,“ said Sohom Banerjee, managing director of advisory and research firm Quantive Advisory.
„Others may reduce discounts, adjust prices or encourage a different payment method. Some may prefer cash for particular purchases.“
The postponement means the fees will not take effect during the Deepavali shopping season, which typically sees a surge in spending on items ranging from clothing and electronics to household goods.