UPI MDR deferred until after Diwali, new date to be notified: NPCI
Mumbai, Oct 13, 2026
NPCI has postponed the levy of MDR on select UPI merchant transactions, originally due from October 15, while leaving the proposed fee structure unchanged
The National Payments Corporation of India (NPCI) has deferred the levy of merchant discount rate (MDR) on select UPI transactions until after Diwali, just two days before it was due to take effect, and said the new date would be notified separately.
The deferment offers merchants a breather during the ongoing festive season. The levy was originally scheduled to take effect on 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 at a date to be notified separately,” NPCI said in a statement.
There will be no change in the MDR structure, a source confirmed.
An MDR is a fee paid by a merchant to the bank and payment company processing a digital transaction.
The MDR is set at 0.40 per cent and capped at ₹300. Some categories of merchant transactions, including bill payments, fuel and education, among others, will attract a flat fee of ₹5.
In the run-up to the October 15 deadline, there had been discussions about pushing the implementation date to January 1. NPCI’s clarification, however, indicates that the levy will now come into effect shortly after Diwali.
Retail traders’ associations had called for a “No UPI Day” on October 2 to protest the proposed fee, but withdrew the protest after meeting Union Finance Minister Nirmala Sitharaman last month.
UPI transactions hit record daily average in September
UPI recorded a record average of 802 million transactions a day in September, with an average daily transaction value of ₹97,913 crore.
Transaction volume rose 22.6 per cent from a year earlier to 24.07 billion in September, up from 19.63 billion a year earlier. The total value of transactions increased 18 per cent to ₹29.37 trillion from ₹24.89 trillion.
On a month-on-month basis, transaction volume fell 1.8 per cent from 24.51 billion in August, partly because September had 30 days compared with 31 in August.
Transaction value declined 1.5 per cent to ₹29.37 trillion from ₹29.82 trillion.
[The Business Standard]
