New Delhi, Oct 13 : The implementation of merchant discount rate (MDR) charges on select Unified Payments Interface (UPI) transactions exceeding Rs 2,000 has been deferred until after Diwali, the National Payments Corporation of India (NPCI) said on Tuesday.
The decision was taken by the UPI and Services Steering Committee, keeping in view the festive season and requests from traders to postpone the rollout, which was earlier scheduled to begin on October 15.
“The UPI and Services Steering Committee today 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,” the NPCI said in a statement.
The revised implementation date will be announced separately.
Under the proposed framework, a merchant discount rate of 0.4 per cent will apply to eligible person-to-merchant UPI transactions exceeding Rs 2,000. The charge is intended to support the costs associated with operating and maintaining the digital payment infrastructure.
For transactions in certain sectors, including railways, telecommunications, insurance, fuel and agricultural inputs, a flat MDR of Rs 5 will apply to eligible payments above Rs 2,000.
The charges are applicable to merchants receiving payments and are not intended to be levied on customers making UPI payments. Person-to-person transactions will continue to remain free, while payments to merchants up to Rs 2,000 and transactions covered under the zero-MDR framework for small merchants will remain exempt.
According to the Union Finance Ministry, approximately 96 per cent of merchant transactions will remain unaffected by the new framework.
The proposed changes have drawn attention from traders and businesses amid concerns about the cost of accepting digital payments, particularly during the festive shopping period.
The revised timeline is expected to provide payment service providers and merchants additional time to prepare for the implementation. (KNS)
