MONEY
MDR on UPI payments put off until post-Diwali to avoid festive shopping disruption
- IBJ Bureau
- Oct 14, 2026
The rollout of the Merchant Discount Rate (MDR) on select UPI transactions has been officially deferred until after Diwali.
The National Payments Corporation of India (NPCI) has announced that the implementation — originally scheduled to take effect on October 15, 2026 — will now kick in immediately post-Diwali, with a specific date to be notified separately.
The UPI and Services Steering Committee has pushed back the timeline to avoid putting a new transaction cost on merchants and digital payment users during the peak festive shopping season.
Trade bodies and merchant associations had actively protested against the original date due to concerns over compressed retail margins.
When implemented, a 0.4 per cent MDR will apply to eligible person-to-merchant (P2M) UPI transactions above Rs 2,000.
Small merchants and all transactions up to Rs 2,000 will remain completely free.
Approximately 96 per cent of all P2M transactions are expected to remain unaffected by this new levy.
Major fintech entities like Paytm, Pine Labs and MobiKwik had experienced initial fluctuations in their share prices but recovered following the NPCI’s clarity that the MDR implementation is simply delayed, not cancelled.
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