New Delhi, October 8, 2026 (Yes Punjab News)
Trade associations have urged the National Payments Corporation of India (NPCI) to defer the implementation of its revised merchant discount rate (MDR) framework for select Unified Payments Interface (UPI) transactions, scheduled to take effect from October 15.
According to a report citing sources, traders’ bodies have sought a postponement until after the festive season or even early next year, arguing that the new charges could add pressure on merchants during one of the busiest sales periods.
NPCI, which developed the revised MDR structure in consultation with stakeholders, has not yet taken a decision on the request.
Under the new framework, a flat MDR of Rs 5 will apply to select merchant categories for UPI transactions above Rs 2,000. Large merchant transactions exceeding Rs 2,000 will attract an MDR of 0.4 per cent, capped at Rs 300 per transaction.
For capital-market payments, including mutual funds and securities transactions, the MDR has been set at 0.02 per cent, also subject to a maximum charge of Rs 300 per transaction.
NPCI has estimated that the revised framework will cover only around 4 per cent of merchant transactions, while more than 95 per cent of person-to-merchant UPI payments will remain outside the MDR structure.
Small merchants using peer-to-peer merchant models will continue to benefit from zero MDR, according to the framework.
The revised rules also do not impose any monthly quota or cap on free UPI usage by individual users. Users can continue making UPI payments without MDR charges within the applicable free framework.
The new structure includes a dedicated fund aimed at expanding UPI acceptance among small merchants, with 5 per cent of total MDR collections earmarked for the initiative.
MDR revenue will be distributed among participating players and is intended to support the expansion of UPI infrastructure, cybersecurity and innovation.
Banks have also been advised to ensure that merchants do not pass MDR charges on to customers.
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