Kerala's gold and silver traders will protest on October 15, the day a new 0.4% fee on UPI payments above Rs 2,000 takes effect. Jewellers say the charge hits them harder than most because nearly every sale crosses that threshold.
At a glance
- From October 15, UPI merchant payments above Rs 2,000 carry a 0.4% fee, capped at Rs 300 per transaction.
- The Kerala Gold and Silver Merchants Association wants the fee withdrawn and will protest on the day it starts.
- The All India Jewellers and Goldsmith Federation has also joined a wider traders' 'No UPI Day' on October 2.
Background
UPI is India's instant mobile payment system, run by the National Payments Corporation of India (NPCI). Until now, shops have accepted UPI payments without paying a merchant discount rate (MDR), the fee a business pays on each digital payment it receives. Card payments already carry such a fee.
What happened
The Kerala Gold and Silver Merchants Association will stage a protest on October 15 to demand that the new UPI fee be scrapped. The association says the charge comes on top of high capital investment, volatile gold prices and slow sales. Together, it argues, these threaten the survival of small and medium jewellery shops.
Jewellers are not alone. The All India Jewellers and Goldsmith Federation is among several trade bodies backing a 'No UPI Day' on October 2. That day, shopkeepers plan to cover their UPI QR codes and sound boxes with black cloth.
What the fee is
NPCI has set an MDR of 0.4% on UPI merchant payments above Rs 2,000, starting October 15. The fee is capped at Rs 300 per transaction, and 18% GST applies to the fee itself. Payments of Rs 2,000 or less stay free, and NPCI says those make up more than 96% of UPI merchant transaction volume.
Merchants receiving up to Rs 1 lakh a month through UPI are exempt. Railways, telecom, insurance and fuel pay a flat Rs 5 instead.
Why jewellers feel it more
The exemptions help a tea stall, not a jewellery shop. With 24-carat gold near Rs 1.49 lakh per 10 grams, even a small gold coin or a pair of earrings crosses Rs 2,000. On a Rs 1 lakh purchase, 0.4% works out to Rs 400, so the Rs 300 cap applies, plus Rs 54 of GST on that fee.
Jewellers already work on thin margins because gold itself is a pass-through cost. A fixed slice of each sale going to payment fees eats into that margin directly. Some shops may push customers towards cash or bank transfers, or add the cost to making charges.
Our read
Outlook: neutral. A payment fee does not change the gold price itself. It may slightly raise what jewellery buyers pay if shops pass the cost on.
What to watch
- Whether NPCI or the government changes the fee or its exemptions before October 15.
- How many traders take part in the October 2 'No UPI Day'.
- Whether jewellers pass the fee on to buyers through higher making charges.
For information only, not investment advice.
Gold price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2026-09-15: NPCI sets a 0.4% MDR on UPI merchant payments above Rs 2,000, effective October 15.
- 2026-10-02: Trade bodies including the All India Jewellers and Goldsmith Federation plan a 'No UPI Day'.
- 2026-10-15: The UPI fee takes effect and Kerala's gold and silver traders hold their protest.
Demand Drivers
If shops add the fee to making charges, festive jewellery buyers could face slightly higher bills.
Government Policies
NPCI's 0.4% MDR, capped at Rs 300, ends free UPI acceptance for merchant payments above Rs 2,000.
What could lift prices
- A rollback or wider exemption for jewellers would remove an extra cost on retail gold sales.
- Gold prices well below last month's levels make jewellery cheaper for festive-season buyers.
What could weigh on prices
- Higher making charges to cover the fee could put off price-sensitive jewellery buyers.
- Protests and shop disruptions around October 15 could slow sales in Kerala.
Country impact
| Country | Impact | Reason |
|---|---|---|
| India | Medium | The fee changes the cost of accepting UPI for jewellers and other shops with high-value sales. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Jewellery | Negative | Almost every jewellery sale crosses Rs 2,000, so most UPI receipts will now carry a fee. |
| Banking | Positive | Banks and payment firms gain a revenue stream from high-value UPI merchant payments. |
Who gains, who loses
- Banks and UPI payment apps: They earn MDR on merchant payments above Rs 2,000 for the first time.
- Small and medium jewellers: They pay up to Rs 300 plus GST on each large UPI sale, from already thin margins.
Other ways this could play out
- If trade protests gain ground, NPCI could widen exemptions or lower the cap before October 15.
- If the fee stays, more jewellery payments could shift to cash or direct bank transfers.
Price risks
- Gold's own swings will matter far more to jewellery prices than a payment fee.
- A policy reversal would make the issue moot.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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