NPCI delays UPI Merchant Discount Rate implementation until after Diwali

The National Payments Corporation of India postponed the implementation of the Merchant Discount Rate (MDR) for select UPI transactions until after Diwali. The charges, which were originally scheduled for October 15, 2026, will be introduced on a date to be announced later. The proposed fee structure includes a 0.4% MDR for select person-to-merchant UPI transactions, while flat fees of Rs 5 apply to sectors such as fuel, education, and insurance.

Merchant associations opposed the charges, warning that the new fees could cause a margin squeeze. Industry sources also cautioned that higher payment costs could weaken consumer sentiment during festive sales, while merchants sought a delay until January 2027 to better understand the varying policies and rates.

Dealers appeal to NPCI regarding the MDR framework while the state controls pump prices and dealer margins.