New Delhi: In a significant relief for businesses and digital payment users ahead of the festive season, the National Payments Corporation of India (NPCI) has postponed the implementation of the Merchant Discount Rate (MDR) on select UPI transactions exceeding ₹2,000. The charges were originally scheduled to take effect from October 15, but the decision has now been deferred following a meeting of the UPI and Services Steering Committee. NPCI said the revised implementation date will be announced separately after the Diwali festival, ensuring that merchants and customers can continue using UPI without any immediate changes during the peak shopping season.

Under the proposed framework, a Merchant Discount Rate of 0.4 percent would apply only to select Person-to-Merchant (P2M) UPI transactions above ₹2,000. The fee is to be borne by merchants rather than customers and will be capped at ₹300 for transactions worth ₹75,000 or more. The postponement comes amid concerns from businesses and digital payment stakeholders, who argued that introducing the charges during the festive period could affect commercial activity when digital transactions typically witness a sharp increase across the country.

The delay provides additional time for merchants, payment service providers and other stakeholders to prepare for the new system while maintaining uninterrupted digital payment services during one of the busiest shopping seasons of the year. UPI continues to be India’s most widely used digital payment platform, processing billions of transactions every month. NPCI is expected to announce a fresh implementation schedule after Diwali, along with any further operational guidelines regarding the proposed merchant charges.