National News (08/10/2026): The proposed rollout of a new 0.4% Merchant Discount Rate (MDR) on eligible UPI transactions may be delayed until January 2027, following concerns raised by merchant organisations, fintech companies and payment industry stakeholders.
The industry has reportedly urged the National Payments Corporation of India (NPCI) to defer the implementation, particularly to avoid introducing additional merchant charges during the ongoing festive season, when transaction volumes typically surge. NPCI is expected to consider the requests after consultations with the Finance Ministry and other stakeholders.
The UPI Steering Committee had approved the proposed 0.4% MDR, equivalent to 40 basis points, for eligible merchant transactions above ₹2,000. The revised pricing structure was originally scheduled to come into effect from October 15, 2026.
Under the proposed framework, the MDR would be capped at ₹300 per transaction, while certain categories of transactions would attract lower rates. For instance, an eligible UPI payment of ₹10,000 would attract a merchant fee of ₹40 at the proposed 0.4% rate.
The proposed MDR would be charged to merchants rather than directly to customers. However, representatives from the merchant and payments ecosystem have expressed concerns over the timing of the rollout and its potential impact on businesses during the high-volume festive period.
Industry bodies are therefore seeking a postponement until after the festive season, with January 2027 emerging as a possible revised implementation timeline. The final decision is expected after NPCI completes consultations with industry stakeholders and the Finance Ministry. Until then, the existing UPI payment structure will continue to remain in place.
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