UPI MDR Charges Put On Hold Until After Diwali, NPCI Announces Big Decision Ahead Of Festive Season

Mumbai: The National Payments Corporation of India (NPCI) has decided to defer the implementation of Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) merchant transactions until after Diwali, providing temporary relief to merchants during the festive season.

The decision was taken by the UPI and Services Steering Committee on Tuesday, October 13, considering the ongoing festive shopping period.

MDR Implementation Post Diwali

According to NPCI's official communication, MDR on select Person-to-Merchant (P2M) UPI transactions will now be implemented immediately after Diwali.

However, the exact implementation date has not been announced. NPCI said the date would be notified separately.

The announcement comes ahead of the festive shopping period, when digital transactions typically increase across retail stores, online platforms and other merchant establishments.

What Does MDR Mean?

Merchant Discount Rate is a fee generally charged to merchants for processing digital payment transactions.

The proposed implementation covers select P2M transactions rather than all UPI payments.

NPCI's latest communication does not specify the applicable MDR rates, transaction thresholds or categories of merchants that would come under the revised framework.

These details will require further clarification through subsequent official notifications.

What Changes For Merchants?

The postponement means merchants covered by the proposed framework will not face the new MDR implementation during the festive period.

For businesses accepting UPI payments, the decision provides additional time to prepare for possible changes in transaction processing costs.

However, the financial impact will depend on the final implementation guidelines.

NPCI To Announce New Date

NPCI operates India's retail payments and settlement infrastructure, including UPI, which supports digital transactions between individuals and businesses.

The organisation works with banks and payment service providers to strengthen digital payment systems nationwide.

The latest decision signals a temporary postponement rather than withdrawal of the proposed MDR framework.

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