Merchant Fee on UPI Payments May Be Deferred Till January 1
The implementation of the new merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions above Rs 2,000 is likely to be deferred to January 1, 2027, instead of the earlier proposed October 15 rollout date.
Mumbai: The implementation of the new merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions above Rs 2000 is likely to be deferred to January 1, 2027, instead of the earlier proposed October 15 rollout date.
“Most likely the roll out will just be delayed till January.
An announcement is expected in the next few days,” a senior industry official told DC.
The move comes as merchant associations, retailers, fintech companies requested for a deferral.
A final decision on delaying the rollout is yet to be taken by the National Payments Corporation of India (NPCI) that operates and manages the UPI.
Discussions regarding this matter are also underway with the Ministry of Finance.
Merchants, trade associations, MSME retailers had raised concerns that the introduction of MDR from October 15, coincides with the festive season (which starts from October and lasts till December) where a large share of transactions crosses the Rs 2,000 limit.
They had argued that the introduction of MDR would put further pressure on them and also affect consumer purchasing behaviour.
On the other hand, payment companies have asked for a deferral to allow them to upgrade their systems for the rollout.
These issues were recently discussed by the UPI Steering Committee.
Last month, the NPCI had announced that effective October 15 an MDR of 0.4 per cent will be introduced on Person-to-Merchant (P2M) UPI transactions above ₹2,000 while high value purchases of Rs ₹75,000 and above will attract MDR fee of ₹300 per transaction.
For specific merchant categories such as railways, telecom services, insurance, and fuel, among others, a flat MDR of Rs 5 per transaction shall be applicable for transactions above Rs 2,000.