MDR on UPI transactions over Rs 2,000 deferred; to come into effect post Diwali
The Indian government has deferred the implementation of a 0.4% Merchant Discount Rate on UPI transactions over Rs 2,000 until after the Diwali festival. This decision aims to prevent potential disruptions to retail payments during the high-spending festive season.
Why it matters
The delay impacts the revenue models of digital payment providers and ensures stability for millions of consumers and merchants during India's peak shopping period.
The government on Tuesday has deferred the rollout of a 0.4% Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions exceeding Rs 2,000, pushing the implementation beyond the October 15 deadline. The National Payments Corporation of India (NPCI) said the charge will come into effect after Diwali.The original plan allowed merchants to be charged MDR on person-to-merchant transactions exceeding Rs 2,000, while person-to-person payments were to remain free.The proposed change had already raised the possibility of a delay.Earlier reports, citing a regulatory official and an industry executive familiar with the matter, suggested that the government was considering postponing the rollout by a few months, potentially until January 2027.The timing of the original October 15 deadline was significant because the festive season, which runs from October to December, typically brings a…
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