New Delhi, 10 November (H.S.): With Diwali now over, the festive season is set to draw to a close following Bhai Dooj and Chhath. Attention is therefore turning to the next major move by the National Payments Corporation of India (NPCI), as consumers and traders across the country await clarity on when the Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions will come into effect. NPCI had initially made preparations to introduce the MDR levy from October 15. However, considering the festive shopping season and the convenience of the general public, the implementation was deferred until after Diwali.
In an official statement issued on October 13, NPCI announced that the introduction of MDR charges would be postponed until after Diwali, pending a further notification. The UPI and Services Steering Committee decided to defer the measure temporarily to avoid imposing any additional financial burden on shopkeepers and ordinary consumers during the festive period. NPCI had stated that, in view of the festive season, MDR charges on certain merchant transactions would be introduced after Diwali. A separate official notification announcing the revised implementation date is expected to be issued.
Under the proposed framework, an MDR of 0.4 per cent has been prescribed for person-to-merchant (P2M) UPI transactions exceeding Rs. 2,000, subject to a maximum charge of Rs. 300. In sectors such as railways, insurance and fuel, transactions above Rs. 2,000 will attract a flat fee of Rs. 5 per transaction. Payments related to mutual funds and the stock market will be subject to an MDR of 0.02 per cent, with the maximum charge capped at Rs. 300.
The relief for consumers is that the proposed charges will be borne entirely by merchants, with ordinary customers not required to make any additional payment. Users making payments through applications such as Google Pay, PhonePe and Paytm will not face any additional financial burden. Moreover, person-to-person (P2P) money transfers will continue to remain completely free, as before.
NPCI is expected to announce the implementation dates for the new framework soon.
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Hindusthan Samachar / Jun Sarkar
