NPCI Defers UPI MDR Implementation Till Post Diwali

The National Payments Corporation of India (NPCI) has postponed the launch of a merchant discount rate (MDR) on certain UPI person-to-merchant (P2M) transactions until after the Diwali holiday, pushing back the original October 15 start date. The decision was made by the NPCI's UPI and Services Steering Committee, taking the festive season into account.

The committee has not yet set a new rollout date, which will be announced separately. This announcement confirms a delay in the implementation but does not specify January 1, 2027, as the new deadline, as previously reported. Under the proposed UPI MDR, merchants would face a fee of 0.40% on eligible P2M UPI transactions exceeding ₹2,000, with a maximum charge of ₹300 per transaction.

Retail traders' associations had strongly opposed the move. The committee is also reportedly contemplating exempting businesses with an annual turnover of up to ₹40 Lakh from the proposed fee.