Paytm, MobiKwik and Pine Labs Shares Fall as India Weighs Delay in UPI Merchant Fee Rollout

Shares of Indian digital payments companies fell sharply on Thursday after reports that the proposed fee on larger UPI transactions could be pushed back by a few months. 

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Paytm shares dropped 5.5%, MobiKwik fell 7% and Pine Labs declined 3% as investors reacted to the possibility of a delay in a measure that could have opened up a new source of revenue for payment companies. 

The proposed fee was scheduled to take effect from October 15. A final decision on whether to postpone it has not yet been taken by the National Payments Corporation of India (NPCI), according to Reuters. 

What Is Changing for UPI Payments? 

India announced last month that merchants would face a 0.4% charge on UPI transactions exceeding ₹2,000. 

The move would mark a significant change for the country’s digital payments ecosystem after more than six years of zero-cost UPI payments. 

The proposal, however, has faced opposition from retailers and a large brokerage. 

Now, authorities are considering giving the industry more time before the new fee comes into effect. 

One industry executive cited by Reuters said the rollout could potentially be pushed to January. 

That remains a possibility rather than a confirmed date. 

Festive Season Timing Adds to Concerns 

The original October 15 rollout would have landed in the middle of India’s festive season, a period that typically sees a jump in consumer spending. 

Delaying the change could give payment companies more time to upgrade their systems while reducing the risk of disruption for retailers and consumers during one of the busiest shopping periods of the year. 

The sources cited by Reuters also said additional time could help payment companies avoid passing costs on to customers. 

NPCI had not responded to Reuters’ request for comment at the time of publication. 

Why Payment Stocks Fell 

For listed payment companies, the concern is fairly straightforward. 

The proposed merchant charge could benefit payment firms. Any delay means that potential benefit may arrive later than investors had expected. 

That weighed on the sector on Thursday. 

Paytm lost 5.5%, while MobiKwik recorded the steepest decline among the three stocks mentioned in the report, falling 7%. Pine Labs slipped 3%. 

The broader market was also under pressure on Thursday, with both the Nifty 50 and Sensex trading lower amid concerns over interest rates and higher crude oil prices. 

UPI’s Scale Makes the Decision Significant 

Any change to UPI’s pricing model carries weight simply because of how deeply the system is embedded in everyday payments. 

More than 500 million people in India use UPI for purchases ranging from small everyday transactions to higher-value spending. 

PhonePe and Google Pay together accounted for around 80% of UPI transaction value in August, according to the Reuters report. 

That scale means even a fee limited to transactions above ₹2,000 could have implications across merchants, payment platforms and consumers. 

For now, however, nothing has changed officially. The 0.4% fee remains scheduled to begin on October 15, while NPCI considers whether the implementation needs to be pushed back. 

For payment companies and their investors, the next key development will therefore be NPCI’s final decision and whether the new fee begins this month or is deferred until later.