New Delhi : The implementation of Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) transactions has been deferred until after Diwali. The UPI and Services Steering Committee decided that MDR on select person-to-merchant (P2M) transactions would be implemented immediately after Diwali. The exact date will be announced separately, according to an NPCI release dated October 13.
A report earlier said NPCI was weighing a postponement of the implementation until January 2027 amid concerns over the impact on merchants and consumers during the festive shopping season. The industry had raised concerns over confusion around the proposed charges, including which transactions would attract MDR and whether different rates would apply across categories.
The postponement gives the industry more time before the charges take effect, although the revised implementation date is yet to be announced. NPCI has not specified the date on which the charges will be introduced or provided further details on the transactions covered by the decision in its October 13 release. The UPI Steering Committee fixed the UPI MDR at 0.4 per cent for transactions above Rs 2,000. MDR is the fee charged to merchants for processing digital payments.
“Keeping in mind the festive season, the UPI and Services Steering Committee today (October 13) decided that MDR on select Person-to-Merchant (P2M) UPI transactions shall be implemented immediately post Diwali,” NPCI said in a media statement on Tuesday. The new date of implementation will be notified later, the NPCI added.
The earlier rollout date was October 15. However, it coincided with the festive shopping season, when consumer spending typically rises. Therefore, the rollout was delayed to give payment firms and consumers more time to update their systems and to address concerns about introducing the change during the festive season.
Earlier in September, the UPI Steering Committee fixed the UPI MDR at 0.4 per cent for transactions above Rs 2,000. MDR is the fee charged to merchants for processing digital payments. The 0.4 percent fee translates into Rs 8 per Rs 2,000 spent or Rs 40 for every Rs 10,000 paid using UPI. Meanwhile, payments above Rs 2,000 in select sectors such as railways, telecom, insurance, fuel and agricultural inputs will attract a flat MDR of Rs 5.
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