India's plan to charge merchants for large UPI payments may be delayed. The 0.4 percent fee on transactions above 2,000 rupees was set to begin on October 15. Reports now say it could move to January 1, 2027.

The NPCI board is expected to take a final decision soon. Banks and fintech firms had asked for more time to update their systems and inform merchants.

The proposed fee applies only to merchant payments, not to person-to-person transfers. A customer paying a shop above the limit would trigger the charge. The merchant would bear the cost.

Payments stocks reacted to the news. Paytm shares fell nearly 10 percent in trading as investors weighed the impact of the delay on revenue plans.

The government introduced the fee to help banks and apps recover the cost of running the UPI network. UPI now processes billions of transactions every month.

Small merchants have opposed the charge. They fear it will push customers back to cash. Industry groups want the fee limited to large businesses.

The Finance Ministry has said digital payments will remain free for small users. A final decision is expected in the coming weeks.