The start of merchant discount rates (MDR) on UPI may be pushed from October 15 to January 1, 2027. Business Standard reported this, citing sources. A final decision is expected in the coming days.
The delay would keep UPI free for merchants during the festive season, which runs until Christmas. It comes amid opposition from retail traders’ associations. The UPI and Services Steering Committee, led by NPCI, met on Wednesday to discuss the timing and other clarifications.
Traders had planned a “No UPI Day” on October 2. They withdrew the call after meeting Finance Minister Nirmala Sitharaman last month.
The committee is considering exempting businesses with annual turnover up to ₹40 lakh. Under the current framework, businesses with monthly turnover up to ₹1 lakh are exempt.
MDR is a fee paid by merchants to the bank and payment company. Consumers will not pay it. A 0.40% MDR would apply to merchant transactions above ₹2,000 and to peer-to-merchant transactions. It would be capped at ₹300. Some categories, such as bill payments, utilities, education and fuel, would have a flat ₹5 fee per transaction above ₹2,000.
Authorities are also considering raising the daily UPI limit for certain categories from ₹1 lakh to ₹2 lakh.
UPI averaged 802 million transactions a day in September. Volume rose 22.6% year-on-year to 24.07 billion. Value rose 18% to ₹29.37 lakh crore.
