NPCI Defers UPI MDR Charges Until After Diwali, New Implementation Date To Be Announced

Mumbai: The National Payments Corporation of India (NPCI) has postponed the implementation of Merchant Discount Rate (MDR) on certain Unified Payments Interface (UPI) merchant transactions until after Diwali. The UPI and Services Steering Committee made this decision on Tuesday, October 13, due to the ongoing festive shopping season.

MDR Implementation Post Diwali NPCI explained that MDR on selected Person-to-Merchant (P2M) UPI transactions will commence immediately after Diwali. However, the precise implementation date remains unannounced, and the organization stated that it will be notified separately. The announcement was made ahead of the festive shopping period, during which digital transactions typically surge across retail outlets, online platforms, and other merchant establishments.

Merchant Discount Rate Explained Merchant Discount Rate refers to a fee typically charged to merchants for processing digital payment transactions. The proposed implementation applies to select P2M transactions, rather than all UPI payments. The specifics of the applicable MDR rates, transaction thresholds, or merchant categories under the revised framework have not been disclosed in NPCI's latest communication.

Impact on Merchants The postponement implies that merchants covered by the proposed framework will not be subjected to the new MDR implementation during the festive period. Businesses accepting UPI payments now have additional time to prepare for potential changes in transaction processing costs. The extent of the financial impact will hinge on the final implementation guidelines.

NPCI's Role NPCI oversees India's retail payments and settlement infrastructure, including UPI, facilitating digital transactions between individuals and businesses. The corporation collaborates with banks and payment service providers to bolster digital payment systems across the nation. The latest decision signifies a temporary delay rather than the withdrawal of the proposed MDR framework.

Merchants and payment service providers will have to await the official notification confirming the revised implementation date and applicable conditions.