UPI Charges on Select Merchant Transactions Above ₹2,000 Deferred Until After Diwali
NPCI has postponed the rollout of Merchant Discount Rate charges on select UPI merchant transactions until after Diwali. The exact implementation date is yet to be announced.
The rollout of Merchant Discount Rate (MDR) charges on select Unified Payments Interface (UPI) merchant transactions has been deferred until after Diwali, the National Payments Corporation of India (NPCI) announced on Tuesday.
The UPI and Services Steering Committee decided to introduce the charges immediately after the festive period. NPCI said the exact date would be notified separately.
The decision follows concerns from merchant groups, fintech companies and payment firms about introducing the charges during the busy festive shopping season. The rollout had earlier been scheduled for October 15.
What are the proposed UPI charges?
The proposed framework includes a 0.4% MDR on select person-to-merchant (P2M) UPI transactions above ₹2,000. At this rate, a merchant would pay ₹40 on an eligible transaction worth ₹10,000.
MDR is a fee charged to merchants for accepting digital payments. The applicable rate and transaction categories determine which payments attract the charge.
Industry stakeholders have raised questions about which transactions would be covered and whether different merchant categories would face different rates.
The postponement gives businesses and payment companies additional time before implementation. However, NPCI's October 13 announcement did not specify the revised date or provide further details about the transactions covered.
Consumers should note that the proposed MDR applies to select merchant transactions, not necessarily every UPI payment above ₹2,000. The final impact will depend on the notified rules and how the charges are applied.
