NPCI Defers UPI MDR Implementation Until After Diwali

India's National Payments Corporation (NPCI) has deferred the implementation of a merchant discount rate (MDR) on select UPI person-to-merchant (P2M) transactions, rescheduling the rollout from October 15 to an unspecified date after the Diwali festival.

The decision was made by the UPI and Services Steering Committee, citing the ongoing festive season, according to an NPCI statement. A new implementation date will be announced separately. This postponement confirms earlier indications of a delay but does not set a new fixed deadline, such as the January 1, 2027, date previously suggested in some reports.

The proposed MDR structure would have charged merchants 0.40% on eligible P2M UPI transactions exceeding ₹2,000 (approximately $24 USD), with a cap of ₹300 (approximately $3.6 USD) per transaction.

The plan had faced significant opposition from retail trader associations. Reports also indicated that the committee was considering exempting businesses with an annual turnover of up to ₹40 Lakh (approximately $48,000 USD) from the proposed fee.