Daijiworld Media Network - New Delhi

New Delhi, Oct 13: The National Payments Corporation of India (NPCI) on Tuesday deferred the implementation of the Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) merchant transactions until after Diwali, providing temporary relief to merchants and consumers during the festive season.

In a statement, NPCI said its UPI and Services Steering Committee had decided to postpone the rollout, keeping the festive season in mind. The framework was originally scheduled to come into effect from October 15.

“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 at a date to be notified separately,” NPCI said.

The payments body added that the revised implementation date would be announced separately.

Following the announcement, fintech stocks witnessed a sharp recovery, rebounding from their intra-day lows.

Under the proposed MDR framework, select merchant categories, including railways, telecom services, insurance and fuel purchases, would attract a flat charge of Rs 5 on UPI transactions exceeding Rs 2,000.

For payments above the same threshold made to large merchants, a charge of 0.4 per cent would apply, subject to a maximum cap of Rs 300 per transaction.

NPCI has maintained that the revised MDR structure would have a limited impact on the broader UPI ecosystem.

According to earlier estimates, only around 4 per cent of merchant transactions are expected to fall under the new framework, while more than 95 per cent of person-to-merchant (P2M) UPI transactions would continue to remain exempt from MDR charges.

The framework also retains the zero-MDR regime for small merchants operating under the person-to-person merchant (P2PM) model, ensuring that smaller businesses are not burdened with additional transaction costs.

The decision to defer the rollout comes amid heightened industry discussions over the proposed reintroduction of MDR on select UPI transactions and its potential impact on merchant payments, fintech companies and the wider digital payments ecosystem.