MDR charges on select Person-to-Merchant UPI transactions above ₹2,000 will not start on 15 October as planned. Here's what we know about the new date.
The UPI and Services Steering Committee took a key decision today. On 13 October, it kept the festive season in mind while deciding on the implementation of the Merchant Discount Rate (MDR).
The MDR was supposed to be implemented starting from 15 October. It will apply to select Person-to-Merchant (P2M) UPI transactions. However, the date of its implementation has been postponed, the National Payments Corporation of India (NPCI) informed on Tuesday.
"UPI and Services Steering Committee today decided that, keeping in mind the festive season, Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions shall be implemented immediately post Diwali on a date to be notified separately," NPCI said in a statement
The MDR charges will now be implemented immediately after Diwali. The exact date will be notified separately.
Diwali 2026 will be celebrated on 8 November. If the promise of ‘immediate’ implementation stays true, MDR charges will likely start on 9 November. This means that, for the next 20 days or so, UPI transactions above ₹2,000 will remain free as usual.
Consumer spending in festive season
India's festive shopping season runs from October through December. Consumer spending rises during this period, with Diwali marking a peak.
Shoppers spend on products including cars, clothes and home appliances. The earlier implementation date would have placed the fee within this shopping season.
More than 500 million people use UPI for purchases ranging from toffees to laptops. PhonePe and Google Pay together held around 80% of transaction value in August. PhonePe belongs to Walmart, while Google Pay is owned by Alphabet.
Reuters reported that postponement could help payment firms upgrade systems and avoid charging customers. Its report cited sources and mentioned festive difficulties for retailers.
The Confederation of All India Traders (CAIT) welcomed the postponement and thanked Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman.
According to the CAIT, the decision is “timely and pragmatic”. This is the period when millions of MSMEs and traders expect higher business volumes.
The postponement of the MDR fees comes as a relief to them. Every trader who sells on a thin margin benefits from this.
CAIT Secretary General Praveen Khandelwal said, “CAIT supports digital payments. But the system must remain affordable and sustainable for merchants, especially small businesses.”
“This deferment will strengthen traders’ confidence and reinforce the Government’s partnership with the trading community in building a stronger Digital India,” the BJP MP from Chandni Chowk added.
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