Stories
UPI Merchant Transaction Fee Postponed
- •The collection of charges for UPI merchant transactions exceeding Rs 2000 has been postponed.
- •NPCI had previously planned to implement a 0.4 percent Merchant Discount Rate starting from the 15th of this month.
- •The postponement considers merchants requests and the upcoming festival season to avoid negative impacts on public shopping.
- •Authorities announced that the MDR implementation date for certain P2M UPI transactions will be announced after Diwali.
Key Questions Answered
The Merchant Discount Rate (MDR) fee of 0.4 percent for certain UPI transactions exceeding Rs. 2,000 was originally scheduled to come into effect on October 15, 2026, which was two days after the announcement.
Considering the upcoming festive season and heavy public shopping, the National Payments Corporation of India (NPCI) announced that the MDR charges for certain Person-to-Merchant (P2M) UPI transactions will be implemented immediately after Diwali, with a specific new date to be announced later.
Merchant bodies, fintechs, and payments companies requested a delay because they were unready due to confusion over varying MDR rates and policies, and feared that implementing fees during the festive season would increase business costs, weaken consumer sentiment amid rising inflation, and potentially drive small traders back to cash transactions.
