Business EconomyPosted at: Oct 13 2026 2:24PM


NPCI defers MDR on select UPI transactions until after Diwali

New Delhi, Oct 13 (UNI) The National Payments Corporation of India (NPCI) on Tuesday postponed the implementation of the merchant discount rate (MDR) on select Unified Payments Interface (UPI) transactions until after Diwali, providing temporary relief to merchants during the festive season. The levy was scheduled to take effect on October 15, while the revised implementation date will be announced separately.
The decision comes just two days before the original deadline. The deferment will not alter the existing MDR structure, and the proposed charges will remain unchanged when the levy is implemented.
“UPI and Services Steering Committee on Tuesday has decided that, keeping in mind the festive season, Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions shall be implemented immediately post Diwali at a date to be notified separately,” NPCI said in a statement.
MDR is the fee merchants pay to banks and payment service providers for processing digital transactions. Under the proposed framework, the charges will apply to eligible UPI payments made to merchants for transactions exceeding Rs 2,000.
The proposed MDR is set at 0.40 per cent of the transaction value, with a maximum cap of Rs 300. Certain categories, including bill payments, fuel and education, will attract a flat fee of Rs 5, according to the proposed structure.
The postponement follows discussions around a possible extension of the implementation deadline to January 1. However, NPCI's latest clarification indicates that the levy is expected to be introduced shortly after Diwali, rather than being pushed back to the beginning of the next calendar year.
The deferment gives businesses additional time before the proposed charges take effect, particularly during a period when consumer spending and digital payment volumes typically rise. Merchants will have to wait for NPCI to announce the revised date for implementation.
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Tags: #NPCI defers MDR on select UPI transactions until after Diwali
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