New Delhi, Oct 9: The implementation of the proposed Merchant Discount Rate (MDR) on UPI transactions, which was scheduled to take effect from October 15, may be postponed for now. The proposal is reportedly being considered for implementation from January 2027 instead, to give merchants and payment companies more time to prepare.

Under the proposal, a 0.4% fee would be levied on merchants for UPI transactions exceeding Rs 2,000. Consumers would not be directly charged this fee. However, there are concerns that merchants may either encourage customers to pay in cash or pass on the additional cost to consumers.

Business representatives have warned that such developments could undermine the progress India has made in promoting digital payments.
 

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According to an official familiar with the matter, the 0.4% fee on UPI transactions exceeding Rs 2,000 was scheduled to come into effect on October 15. However, the National Payments Corporation of India (NPCI) has not yet taken a final decision on the proposal.

The implementation of the proposed fee could be delayed by a few months. Such a postponement would give payment companies additional time to upgrade their systems and provide relief to merchants during the festive season, when transaction volumes typically rise.