No UPI MDR From October 15? Government May Defer New Charges Amid Festive Season
The implementation of the Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) transactions, earlier scheduled to begin from October 15, may be postponed until January 2027, according to a Times of India report.
The implementation of the Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) transactions, earlier scheduled to begin from October 15, may be postponed until January 2027, according to a Times of India report. The proposal is being considered amid requests from merchant bodies, fintech companies and other stakeholders for more time to prepare for the new fee framework.
A final decision on the proposed delay has not yet been announced. According to the report, the government and stakeholders are discussing whether the rollout should be deferred beyond the festive season, with January 2027 being considered as a possible new timeline. UPI MDR From October 15: RBI Governor Sanjay Malhotra Says 0.4% Fee Unlikely to Hit Transaction Volumes.
Why Is UPI MDR Rollout Being Delayed?
The proposed delay comes ahead of the crucial festive shopping season, when digital payments typically see a significant rise. Merchant groups and payment companies have raised concerns about the readiness of businesses and the implications of introducing MDR during this period.
The National Payments Corporation of India (NPCI), which operates the UPI infrastructure, has received requests to postpone the implementation. Discussions are also taking place with the Finance Ministry, with a decision expected in the coming days, according to reports. The Economic Times has also reported that the MDR rollout could be deferred from October 15 to January 1, 2027, potentially providing retailers and businesses relief during the festive period. UPI Charges Above INR 2,000: Supreme Court Declines Stay on New MDR Framework.
What Is the New UPI MDR Rule?
Under the new framework, a 0.4% MDR is proposed on specified person-to-merchant (P2M) UPI transactions above ā¹2,000. The charge is capped at ā¹300 for transactions of ā¹75,000 and above. The MDR is a fee paid within the payment ecosystem for processing merchant transactions. It is not a direct transaction fee that UPI users will have to pay. Person-to-person (P2P) UPI transfers will continue to remain free, irrespective of the transaction amount. Payments to merchants up to ā¹2,000 will also remain outside the new MDR framework.
Will Customers Have to Pay UPI Charges?
The proposed MDR is not intended to be a separate charge on consumers making UPI payments. The government has maintained that consumers will not face transaction charges under the new framework. The government has also said that the majority of merchant transactions will remain unaffected. According to the Finance Ministry, around 96% of P2M UPI transactions are expected to remain outside the MDR framework. The impact of the proposed MDR has nevertheless become a subject of debate among merchants and payment industry players, particularly because of concerns that businesses could try to recover the additional cost through higher prices.
UPI MDR Decision Comes Ahead of Festive Season
The timing of the proposed October 15 rollout has emerged as a key concern. The period coincides with the festive shopping season, when UPI transactions are expected to increase as consumers spend more on retail purchases and services. A delay until January 2027 would therefore allow merchants and payment companies to navigate the festive period without the immediate implementation of the new MDR structure. However, the final timeline is still subject to a decision by the authorities.
What Happens to UPI MDR From October 15?
For now, the October 15 implementation date has not been formally withdrawn. The possibility of postponement is under consideration, and the final decision is awaited. The proposed framework, if implemented, would introduce MDR only on specified higher-value merchant transactions while keeping P2P payments and most smaller merchant transactions free. Meanwhile, reports of a possible delay have already affected shares of some digital payment companies. Paytm and MobiKwik came under pressure in the stock market after reports suggested that the MDR rollout could be deferred to January 2027.
(The above story first appeared on LatestLY on Oct 08, 2026 02:15 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
