Following a request from traders to delay UPI transaction charges, the rollout of Merchant Discount Rate (MDR) charges has been pushed to the second week of November, after Diwali, the organisation said in a press release on Tuesday.
The date of implementation will be notified separately, the NPCI added.
“UPI and Services Steering Committee today (October 13) decided that, keeping in mind the festive season, MDR on select Person-to-Merchant (P2M) UPI transactions shall be implemented immediately post Diwali,” NPCI said in a media statement.
Payments between individuals, as well as most everyday merchant transactions, would continue to remain free. Therefore, the Centre argues that government incentives alone were not a sustainable long-term funding model. However, the government clarified that the charge would be borne by merchants rather than consumers and would be capped at Rs 300 for transactions of Rs 75,000 or more. As per Finance Ministry’s September FAQs, citing industry estimates, running UPI operations costs around Rs 20,000 crore annually.
The proposed fee is intended to help fund the infrastructure required to operate UPI, including system resilience, cybersecurity, fraud prevention and customer support, according to the Centre.
