UPI Merchant Fee Paused: What Your ₹2,000 Pays?

A proposed 0.4% charge on UPI payments above ₹2,000 made to merchants has been postponed past Diwali. Right now, you pay nothing extra — but once it kicks in, small shops may quietly add it to your bill.

Here's what happened: A 0.4% charge on UPI merchant transactions above ₹2,000 was planned for October 15 but has been pushed to after the Diwali festive season.. The fee is levied on merchants who accept UPI payments, not on individual users making transfers — but businesses can pass the cost on to buyers.. Person-to-person UPI transfers remain completely free and are not part of this fee proposal at all..

What you should do: Check whether your regular merchants — grocery apps, restaurants, service providers — announce any surcharge or price revision once the fee eventually launches.. If the fee rolls out, consider splitting large purchases into two sub-₹2,000 UPI payments where the merchant and platform allow it, to legally avoid the charge.. Compare UPI-linked credit cards: some cards offer cashback on UPI spends that could offset any cost merchants eventually pass through to you..

Pro tip: Rupay credit card linked to UPI currently carries different interchange rules — if a merchant fee exempts Rupay UPI, switching your linked card could keep your big purchases charge-free.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.