MDR on select UPI transactions above Rs 2,000 to take effect after Diwali

The proposed Merchant Discount Rate (MDR) of 0.4 per cent on select Unified Payments Interface (UPI) merchant transactions exceeding Rs 2,000 will be implemented after Diwali, the National Payments Corporation of India (NPCI) said on Tuesday.

The decision postpones the proposed October 15 rollout, with the new implementation date to be announced separately.

The UPI and Services Steering Committee decided to defer the charges, keeping in view the festive season, NPCI said in a statement.

"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.

The proposed MDR applies to select person-to-merchant payments above Rs 2,000. The fee will be borne by merchants within the digital payments ecosystem, while consumers will not be charged for making UPI payments.

The decision comes amid speculation over a possible delay in the proposed fee, which had been scheduled to take effect from October 15.