NPCI postpones UPI MDR charges rollout to post-Diwali, second week of November

The National Payments Corporation of India (NPCI) has decided to delay the rollout of MDR (Merchant Discount Rate) charges until after Diwali, pushing implementation to the second week of November, according to a press note released by the organisation on October 13. The decision came after the UPI Steering Committee met to discuss various challenges, including the ongoing festival season, which had posed obstacles to rolling out MDR charges starting this Thursday as originally planned.

NPCI, which operates UPI, India's dominant digital payments platform, had initially targeted this week for the rollout before opting to push the timeline back. "UPI and Services Steering Committee today decided that, keeping in mind the festive season, MDR on select Person-to-Merchant (P2M) UPI transactions shall be implemented immediately post Diwali on a date to be notified separately," NPCI said in a statement.

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UPI Steering Committee sets UPI MDR at 0.4%

Last month, the UPI Steering Committee had set up the UPI MDR at 0.4 per cent or 40 basis points for transactions exceeding Rs 2,000. MDR refers to the fee merchants pay for processing digital payments. At 0.4 per cent, this would translate to roughly Rs 8 on a Rs 2,000 transaction, or Rs 40 on a Rs 10,000 payment made via UPI.

Since the MDR announcement, the proposal has drawn strong opposition from both merchants and political quarters. The scale of UPI’s reach adds to the stakes — while card payments are accepted at around 11 million terminals nationwide, UPI is used by roughly 100 million merchants, including those in small towns and villages.