UPI 0.4% MDR Charge May Be Deferred To January 2027 As Traders Demand Rollback Ahead Of October 15

Mumbai: Merchants are pushing for the government to withdraw a proposed 0.4% Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions, as reports indicate the rollout scheduled for October 15 might be postponed until January 2027. The National Payments Corporation of India (NPCI), the body managing retail payment and settlement systems, is expected to announce a final decision soon, though no official statement has been released.

The MDR levy, which will target transactions exceeding Rs 2,000, has faced resistance from traders and associations, who staged a protest on October 2, refusing UPI payments. The Confederation of All India Traders (CAIT) has expressed hope for a delay, requesting a higher transaction exemption limit and a raise in the MDR threshold to Rs 10,000.

CAIT's national president, B C Bhartia, stated that the body had discussed these concerns with Finance Minister Nirmala Sitharaman, emphasizing the need for clarification on merchant-to-merchant payments to prevent double and triple charges on merchants. Traders also worry about the timing of the levy, which coincides with the start of the festive season, a period traditionally marked by increased consumer spending.

The Federation of Retail Traders Welfare Association (FRTWA) wrote to Sitharaman, citing financial pressures on small and medium-sized traders, and requested that any transaction costs be postponed until December.