India to impose UPI fees on merchant transactions exceeding Rs 2,000 post-Diwali

India's digital payments ecosystem will see a notable change as the government prepares to implement transaction fees on UPI merchant payments exceeding Rs 2,000, with the new policy expected to take effect after the Diwali celebrations.

The fee structure represents the first major pricing change for merchant transactions on the Unified Payments Interface platform, which has become the backbone of India's digital payment infrastructure. Transactions below the Rs 2,000 threshold are expected to remain fee-free, maintaining accessibility for smaller purchases.

The implementation timeline, positioned after the festive season, suggests policymakers' awareness of the Diwali shopping surge when transaction volumes typically peak. This timing allows merchants and consumers to adjust to the new framework following the high-volume period.

The move comes as regulators seek to balance the growth of digital payments with sustainability concerns for payment service providers operating the UPI network. Industry analysts suggest the fee structure may encourage merchants to optimize transaction patterns while maintaining India's position as a global leader in real-time payment systems.

Stakeholders including merchants, payment aggregators, and banking institutions are expected to adapt operational procedures ahead of the scheduled rollout.