New Delhi, November 10, 2026 (Yes Punjab News)
Merchants are awaiting a revised implementation date from the National Payments Corporation of India (NPCI) for Merchant Discount Rate (MDR) charges on select person-to-merchant (P2M) Unified Payments Interface (UPI) transactions.
NPCI had deferred the introduction of MDR charges beyond the originally scheduled October 15 rollout to avoid imposing additional transaction costs during the festive season.
With Diwali celebrations over and Bhai Dooj falling on November 11, merchants and customers are awaiting clarity on the implementation date. The UPI and Services Steering Committee had decided that MDR on these transactions would be introduced immediately after Diwali, with the exact effective date to be notified separately.
According to NPCI’s frequently asked questions, an MDR of 0.4 per cent will apply to eligible P2M UPI transactions exceeding Rs 2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 and above. For instance, a merchant receiving a UPI payment of Rs 1 lakh would otherwise incur a charge of Rs 400, but the prescribed cap limits the MDR to Rs 300.
Certain merchant categories, including railways, telecom services, insurance and fuel, will attract a concessional flat MDR of Rs 5 per transaction for payments exceeding Rs 2,000, instead of the standard percentage-based rate.
Capital market transactions will attract a concessional MDR of 0.02 per cent, including payments towards mutual funds, securities, stockbrokers and dealers, subject to a maximum cap of Rs 300.
MDR is a merchant-side transaction fee and will be borne by the merchant receiving the payment. Customers making UPI transactions will not be affected. NPCI has also clarified that person-to-person (P2P) UPI transfers will remain free, as the proposed MDR will not apply to such transactions.
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