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NPCI Considers Delaying UPI MDR Implementation to January 2027
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Moneycontrol•08-10-2026, 09:28
NPCI Considers Delaying UPI MDR Implementation to January 2027
- •The National Payments Corporation of India is considering proposals from merchant bodies, fintechs, and payments companies to postpone the UPI MDR implementation to January 2027.
- •The proposed MDR of 0.4 percent for transactions above Rs 2,000 was initially scheduled to come into effect from October 15, 2026.
- •Industry stakeholders cited a lack of readiness, confusion over varying MDR rates, and concerns about rising costs during the festive season as reasons for the delay request.
- •Unlike card networks with uniform rates, UPI features differential rates for utility payments, loan repayments, and capital market transactions, creating implementation complexities.
Key Questions Answered
Merchant bodies, fintechs, and payments companies have requested the NPCI to postpone the implementation of UPI MDR to January 2027. Originally, the MDR charges were scheduled to come into effect on October 15, 2026.
The UPI Steering Committee fixed the UPI MDR at 0.4 percent, or 40 bps, for transactions exceeding Rs 2,000. This fee translates to Rs 8 for every Rs 2,000 spent or Rs 40 for every Rs 10,000 paid using UPI.
Stakeholders requested a postponement due to widespread confusion over varying MDR rates, applicable policies, and industry unreadiness. Additionally, there are concerns that introducing MDR during the festive season amid rising inflation could weaken consumer sentiment and increase business costs.
