The proposed Merchant Discount Rate (MDR) charges on UPI transactions have been postponed until after Diwali, giving merchants and businesses more time before the planned changes take effect. The National Payments Corporation of India (NPCI) made the decision at a UPI steering committee meeting on October 13, following concerns raised by merchants and fintech companies ahead of the festive season.
The proposed MDR rate was reportedly set at 0.4%. However, the rollout has now been delayed, and the revised implementation date is yet to be announced. The decision comes at a time when digital payments are expected to remain busy as consumers shop for Diwali and make festive purchases.
Why Has NPCI Delayed The UPI MDR Rollout?
According to the report, the committee considered the timing of the proposed change and operational concerns before deciding to postpone its rollout. Merchants and fintech companies had requested a delay, with the festive season approaching and businesses preparing for higher transaction volumes.
Introducing a new payment-related charge during this period could require merchants and payment providers to review their systems, processes and customer communications. Postponing the rollout gives stakeholders additional time to prepare while NPCI works towards a new implementation timeline.
The committee has not announced a fresh date for introducing the proposed MDR charges. The delay therefore does not mean the plan has been cancelled; its future implementation will depend on further updates from the authorities.
Also Read: RBI Governor Announces Latest UPI Upgrades At Global Fintech Fest 2026
What Does The Delay Mean For Merchants And Customers?
For merchants, the postponement offers temporary relief from the uncertainty surrounding the proposed fee. Businesses that accept UPI payments can continue monitoring official announcements while preparing for any eventual changes.
For customers, the key point is that the reported delay concerns the proposed MDR rollout. MDR is a fee associated with processing merchant payments, and its impact depends on the final rules and how the charges are applied. The announcement alone does not establish that customers will be charged extra for making UPI payments.
UPI has become a widely used payment method across India, from small local shops to large retailers. Any change to merchant payment costs can therefore draw significant attention from businesses, payment companies and consumers.
For now, the proposed 0.4% MDR rollout has been pushed until after Diwali, with the new date still pending. Merchants and users should watch for further announcements from NPCI for confirmation of the final timeline and applicable terms.
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