New Delhi, 13 October (H.S.): The government has deferred the proposed implementation of Merchant Discount Rate (MDR) charges on Unified Payments Interface (UPI) transactions, which were scheduled to take effect from October 15. The decision is aimed at providing relief to millions of UPI users and merchants across the country ahead of the festive season.

In a post on X on Tuesday, the UPI and Services Steering Committee announced that the implementation of MDR charges on certain person-to-merchant (P2M) UPI transactions would be postponed until after Diwali. The revised implementation date will be announced separately.

According to the committee, the decision was taken in view of the festive season and the need to avoid placing an additional financial burden on consumers and businesses during a period of increased spending.

The committee said the deadline was extended following concerns raised by industry stakeholders, trade associations, fintech companies and payment aggregators with the National Payments Corporation of India (NPCI) and the Ministry of Finance.

The postponement is expected to provide temporary relief to merchants and consumers during the busy shopping period associated with Dussehra, Diwali and Chhath Puja, when digital payment volumes typically rise significantly.

What Is UPI MDR?

Merchant Discount Rate (MDR) is a fee associated with accepting digital payments at merchant establishments. It is generally charged to merchants by payment service providers, banks or other payment intermediaries for processing transactions, subject to the applicable rules and payment arrangements.

Last month, the UPI Steering Committee had proposed an MDR charge of 0.4 per cent on selected person-to-merchant UPI transactions exceeding Rs 2,000. The proposed charges were scheduled to come into effect on October 15.

However, following consultations with industry stakeholders and concerns over the timing of the proposed implementation, the decision has now been deferred until after Diwali. The committee is expected to announce the revised date separately.

The postponement is intended to ensure that merchants and consumers can continue their festive-season transactions without the immediate impact of the proposed changes.

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Hindusthan Samachar / Jun Sarkar