UPI MDR On Select Merchant Transactions to be Implemented after Diwali

The decision to levy a Merchant Discount Rate of 0.4 percent on transactions over Rs. 2,000 has been postponed, much to the comfort of UPI customers. The NPCI announced on Tuesday that a new implementation date would be decided after Diwali.

As per the NPCI circular released last month, person-to-merchant UPI payments over Rs. 2,000 would be subject to a 0.4 percent MDR beginning October 15. “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 on a date to be notified separately,” NPCI said in a statement.

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Under the updated system, certain merchant sectors, such as fuel, insurance, telecom services and railways, will be subject to a flat MDR of Rs. 5 on UPI transactions over Rs. 2,000. According to NPCI’s previous framework, merchant payments of more than Rs. 2,000 would be subject to a fee of 0.4 percent, up to Rs. 300.

UPI MDR on Select Merchant Transactions Shall be Implemented Post Diwali Press Release Link: https://t.co/5KMjOP0tHd https://t.co/pD8IKfN6sR — NPCI (@NPCI_NPCI) October 13, 2026

Additionally, banks have been advised to make sure that merchants do not charge consumers for MDR expenses. As a result, consumers are not anticipated to incur an additional fee for UPI payments in accordance with the updated structure.