October 15 Rollout Of UPI MDR Faces Uncertainty As NPCI Meeting Not Held On Friday

The planned implementation date of a 0.4% merchant discount rate (MDR) charge on Unified Payments Interface (UPI) transactions remains in doubt following the absence of a critical meeting in the UPI Steering Committee on October 9. The National Payments Corporation of India (NPCI), which oversees UPI, has not provided a new meeting date or confirmed the proceeding of the initially scheduled implementation on October 15.

The proposed MDR would be levied on transactions exceeding Rs2,000, amounting to a fee of Rs40 for a transaction of Rs10,000. The UPI Steering Committee, composed of representatives from leading payment applications, banks, and financial technology firms, had reportedly agreed to the new charge in September. However, NPCI has been deliberating proposals to postpone the rollout until January 2027, although no final decision has been made.

Merchants and industry executives have urged for additional time, citing potential disruptions to festive-season sales, uncertainty around transaction categories, and differing MDR policies. They also warn that increased processing costs could impact businesses already navigating inflationary challenges, potentially leading them to pass on these expenses to customers.

With no revised meeting announced, businesses and payment service providers are currently awaiting clarity on the MDR matter and its implementation timeline.