The National Payments Corporation of India (NPCI) postponed the proposed UPI MDR rollout on October 13, delaying merchant fees until after Diwali. The decision follows concerns from merchants and payment companies about introducing transaction charges during the festive shopping season.
NPCI’s UPI and Services Steering Committee announced the delay after reviewing implementation challenges and seasonal business pressures. The organisation said, “MDR on select Person-to-Merchant (P2M) UPI transactions shall be implemented immediately post Diwali on a date to be notified separately.” The revised launch date remains unannounced.
The proposed merchant discount rate stands at 0.4% for select person-to-merchant UPI transactions exceeding Rs. 2,000. The plan also includes a maximum fee of Rs. 300 per transaction, according to the supplied details.
MDR refers to the fee merchants pay for processing digital payments. At 0.4%, a Rs. 10,000 transaction would attract Rs. 40 in charges before applicable limits. The proposed fee does not mean consumers will automatically pay additional charges directly.
Merchant groups, fintech companies and payment firms reportedly urged NPCI to reconsider the timing. They warned that new fees during festive sales could increase operating costs and affect consumer spending.
The concerns also involve different MDR rates and uncertainty over which UPI transactions would qualify. Merchants fear some businesses could pass additional payment costs to customers through higher prices. The delay gives businesses more time to prepare before NPCI announces the final implementation date.
The postponement means the proposed MDR charges will not begin on October 15 as initially expected. Existing UPI payment arrangements remain unchanged until NPCI announces the revised rollout date and final details.
UPI supports digital payments across millions of Indian merchants, including small shops and businesses in smaller towns. The proposed fee structure could influence payment costs across this extensive network. Merchants and payment providers will now watch for NPCI’s post-Diwali announcement on eligible transactions, exemptions and implementation rules.
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