The implementation of a Merchant Discount Rate on select Unified Payments Interface transactions has been deferred until after Diwali, according to the National Payments Corporation of India. The update follows earlier reports that the rollout could be postponed to avoid causing disruptions during the busy festive shopping season.
The UPI and Services Steering Committee determined that the MDR on specific person-to-merchant transactions will take effect immediately following Diwali, with the precise date to be announced through a separate release, the NPCI stated. This decision addresses requests from merchant associations, fintech companies, and payment firms to delay the charges that were initially slated to begin.
Industry stakeholders had raised worries regarding potential confusion surrounding the proposed fees, such as which specific transactions would incur the MDR and whether varying rates would apply across different commercial categories. The proposed framework outlines a 0.4 percent MDR on select UPI transactions exceeding Rs 2,000, meaning a transaction of Rs 10,000 would result in a charge of Rs 40.
MDR represents a fee that merchants pay for accepting digital payments, which can influence operational costs for businesses depending on the payment arrangement. Because the festive season represents a vital period for online retailers and physical store owners marked by a surge in consumer spending, the delay provides the industry with additional breathing room.
While the committee confirmed that the charges will roll out immediately after Diwali, the NPCI has not yet specified an exact calendar date or detailed the full scope of covered transactions. Further clarity regarding the official timeline and implementation guidelines is expected to be released closer to the formal rollout.