In one line
UPI's merchant fee is on hold until after Diwali. When it starts, shops pay 0.4% on UPI payments above Rs 2,000, capped at Rs 300. You, the customer, pay nothing extra, and nobody is allowed to charge you for it.41
Does this apply to you?
Find yourself in the list.
No fee and no new limit for paying or scanning a QR, now or after the fee starts.1
Person-to-person transfers stay free, self-transfers included.
Up to Rs 1 lakh a month received on UPI QR stays at zero. No GST registration needed to qualify.
0.4% on each UPI payment above Rs 2,000, never more than Rs 300 per payment. Not yet, though. It starts on a date NPCI will set after Diwali.4
What the rule actually says
The plain version first, then the line from the primary document.
What it costs, in rupees
Every fee below is paid by the merchant, not by you, and none of it applies until NPCI notifies the new start date.
- Rs 1,500 grocery billRs 0Rs 2,000 or less
- Rs 3,000 at a storeRs 120.4%
- Rs 5,000 restaurant billRs 200.4%
- Rs 1,00,000 laptopRs 3000.4%, capped
- Rs 3,000 train ticketRs 5Flat fee: rail, telecom, fuel, insurance, utilities
- Rs 10,000 one-time mutual fund buyRs 20.02%, capped at Rs 300
What to do
- Keep paying by UPI exactly as you do now. Nothing on your side changes, before or after the fee starts.
- If a shop adds a "UPI charge" to your bill, ask them to take it off. The rule doesn't allow it, and right now there isn't even a fee for them to pass on.
- If they refuse, keep the bill or a screenshot and raise it through your UPI app's help section or your bank.
- Shop owners: nothing is deducted until NPCI announces the new date. Use the gap to check your monthly UPI QR total. Three months in a row above Rs 1 lakh moves you into the paid tier.
The fine print
- The delay moves the start date only. NPCI's statement doesn't scrap the fee or change the rates.4
- The small-shop exemption isn't permanent. Cross Rs 1 lakh a month on UPI QR for three straight months and you're reclassified.
- Credit on UPI, such as a RuPay credit card linked to UPI, sits under separate credit rules. This fee framework doesn't cover it.
- AutoPay mandates (SIPs, OTT subscriptions, bills on autopay) have no prescribed fee under this framework.
What we don't know yet
- The new start date. NPCI says only "immediately post Diwali". One report expects the second week of November, another expects January. Neither is official.65
- Whether the rates change before launch. A source told Business Standard there will be no change, but NPCI's statement doesn't restate the numbers.4
- The government's FAQ still says 15 October. We expect it to be revised once a date is notified.1
- How "no passing it on" gets enforced at a busy counter. The FAQ states the rule but names no penalty.
- The exact fee for school and college payments. The FAQ promises "flat-fee structures or capped processing rates" with no number attached.
Our take
Zero-fee UPI was always being paid for by someone, and a 0.4% charge on big shop payments is a fair way to share the bill. The deferral reads as a delay and nothing more, since NPCI's own words are "immediately post Diwali". It does show who has leverage here: traders asked for the festive season off and got it two days before the fee was due. When it does start, expect a few shops to try a "UPI surcharge" on large bills, and push back when they do. In June 2025 the government called talk of a UPI fee "completely false", so a little skepticism about how this rolls out is earned.3