Hyderabad: The National Payments Corporation of India (NPCI) has postponed the implementation of UPI MDR charges on selected transactions until after Diwali. The charges were scheduled to take effect on October 15. However, the corporation decided to defer them to ease the burden on merchants during the festive shopping season.
In a statement issued on Tuesday, NPCI said its UPI and Services Steering Committee had approved the delay after considering requests from traders. The corporation said it would announce a revised implementation date soon. This year, Diwali falls on November 8.
The decision offers temporary relief to businesses preparing for higher sales during the festival period. Retailers had expressed concern that introducing additional transaction costs at this time could affect their business. As a result, trade associations urged NPCI to postpone the proposed charges.
UPI MDR charges: Which transactions will attract fees?
Under guidelines issued on September 15, NPCI had proposed a merchant discount rate (MDR) of 0.4% on selected person-to-merchant (P2M) UPI transactions above Rs. 2,000. The proposed fee carries a maximum cap of Rs. 300. Merchants, rather than customers, would pay the charge.
Transactions below Rs. 2,000 would remain exempt. Person-to-person (P2P) payments and transactions involving small merchants would also face no MDR charges under the guidelines.
For certain sectors, NPCI proposed a flat fee of Rs. 5 on transactions exceeding Rs. 2,000. These categories include railways, telecommunications, insurance, fuel and education.
The All India Mobile Retailers Association and other trade bodies raised concerns about the timing. They argued that additional costs during the festive season could affect online and offline sales. NPCI considered these requests before deciding to defer the charges.
Until the corporation announces a new date, UPI transactions will continue under the existing arrangements. The proposed MDR charges will therefore remain on hold beyond the original October 15 deadline.