MUMBAI — The National Payments Corporation of India (NPCI) steering committee announced on Tuesday that the implementation of the Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) Unified Payments Interface (UPI) transactions has been put on hold through the festive period. The charges will now take effect immediately following Diwali, with the exact implementation date to be notified in a forthcoming circular.
The decision was finalized during a meeting of the UPI and Services Steering Committee. Officials noted that the deferral is intended to safeguard merchant convenience and sustain consumer spending momentum during the peak festive shopping season, when transaction volumes historically hit record highs across both physical retail and digital commerce platforms.
Under the framework under review, MDR will be levied on specific merchant categories and transaction thresholds rather than standard peer-to-peer (P2P) transfers or micro-retail purchases, preserving friction-free transactions for small shopkeepers and everyday users.
Established by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), NPCI operates as a not-for-profit umbrella organization responsible for critical retail payment rails across the nation—including UPI, IMPS, RuPay, and NACH. A detailed operational directive outlining applicable categories, percentage caps, and interchange sharing terms will be issued following the festive break.