UPI MDR rollout deferred until after Diwali

The decision comes just two days before the proposed implementation of the revised MDR framework on 15 October, providing additional time for banks, payment service providers and merchants to prepare for the new charging structure.

The National Payments Corporation of India (NPCI) has deferred the rollout of merchant discount rate (MDR) charges on certain Unified Payments Interface (UPI) transactions until after Diwali. A fresh implementation date will be announced shortly, NPCI managing director and chief executive officer Dilip Asbe told Mint on Tuesday.

“We have deferred the rollout until after Diwali. The final date will be announced soon,” Asbe said.

The decision comes amid pushback from trade bodies and concerns that the charges could dampen spending during the festive season. On 15 September, the ministry had announced the reintroduction of the merchant discount rate (MDR) on select UPI transactions, after it was scrapped in January 2020.

What it entailed

Under the proposed framework, an MDR of 0.4% was to be levied on eligible person-to-merchant (P2M) UPI transactions exceeding ₹2,000, with a maximum charge of ₹300 for transactions of ₹75,000 and above.

Person-to-person (P2P) transactions and merchant payments of up to ₹2,000 were to remain exempt. Small merchants with monthly UPI transactions of up to ₹1 lakh were also proposed to be excluded from the charges.

MDR is the charge paid by merchants to banks, card networks and point-of-sale providers for offline transactions, and to payment gateways for online purchases.

This is a developing story.

About the Author

Harsh Kumar is a policy reporter at Mint (HT Media Group), where he covers the Ministry of Commerce and Industry along with key departments of the Ministry of Finance, including the Department of Economic Affairs (DEA) and the Department of Financial Services (DFS). With over five years of experience in business and economic journalism, he has developed strong expertise in tracking policy developments and their wider economic impact.<br><br>He has previously worked with Business Standard, Moneycontrol, and Outlook Money, where he reported extensively on banking, financial services, and the broader economy. Over the years, he has built a reputation for delivering accurate, insightful, and impactful stories, supported by a keen eye for detail and a consistent track record of breaking exclusive news.<br><br>An alumnus of Jamia Millia Islamia, Harsh closely follows regulatory changes and key economic trends shaping India’s financial and industrial landscape. His reporting aims to simplify complex policy issues for a wider audience while maintaining depth and credibility.<br><br>Outside of work, he enjoys tracking policy developments, finding scoops, and travelling, reflecting his curiosity about how economic decisions shape everyday life.