MDR on UPI Transactions Above ₹2,000 Deferred Until After Diwali

The proposed implementation of Merchant Discount Rate (MDR) charges on certain UPI transactions above ₹2,000 has been postponed until after Diwali 2026. The delay gives payment service providers and merchants additional time to prepare for the proposed changes to the digital payment system.

The National Payments Corporation of India (NPCI) reportedly announced the postponement on October 13. The new framework had initially been scheduled to take effect on October 15, but the revised implementation date has not yet been announced.

MDR is a fee associated with processing eligible digital payments, generally paid by merchants to payment service providers. Under the proposed framework, a fee of 0.4% may apply to certain merchant transactions exceeding ₹2,000, subject to applicable rules and exemptions.

The proposed charges concern eligible payments made to businesses rather than ordinary person-to-person UPI transfers. Existing exemptions and applicable zero-MDR provisions for certain merchants would continue to depend on the rules governing the payment category.

The postponement is intended to avoid introducing the changes during the busy festive shopping period and allow the payments industry more time to prepare. Merchants and payment providers are awaiting further details about the revised rollout schedule.

The development has drawn attention because UPI is widely used across India for everyday purchases and business payments. Until the new framework takes effect, users and merchants should refer to official NPCI announcements for confirmed details about applicable fees, exemptions and the implementation date.