NPCI, which runs India's UPI instant payment system, has postponed a 0.4% fee on merchant payments above 2,000 rupees that was due to start on 15 October. The rollout now moves to after Diwali, with no new date set. Retailers and fuel stations had threatened to stop accepting UPI. In September alone the network processed more than 24 billion transactions.

What it means: The postponement of the UPI merchant fee shows the dilemma facing any instant payment system that became huge because it was free: someone eventually has to pay for the infrastructure, security and fraud protection, yet the first attempt to charge triggers immediate resistance. Retailers and fuel stations, which run on thin margins, threatened to stop accepting the system, and the operator chose not to risk disruption just before Diwali, the busiest shopping period of the year. The enormous monthly transaction volume shows how deeply UPI is embedded in daily life, which gives merchants bargaining power, since losing them would hurt the whole ecosystem. Europe will face the same question with instant euro payments and the digital euro, where merchant fees are already one of the most disputed points in negotiations, and India's experience suggests pricing should be designed early and transparently, before habits are formed and users expect payments to stay free forever.

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