The govt is considering postponing the 0.4% MDR on eligible UPI transactions above ₹2,000
The rollout could be pushed from October 15 to January, with a final NPCI decision expected soon
GTRI had also urged the government to withdraw the fee and keep UPI free for merchants and consumers
MDR On UPI Rollout From October 15 Likely To Be Postponed
The charge was scheduled to begin on October 15, coinciding with India's annual festive period, when consumer spending typically rises
MDR On UPI Rollout From October 15 Likely To Be Postponed AI Generated Image
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India is considering delaying the rollout of a proposed Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) transactions beyond October 15, with the fee potentially coming into effect from January, as per a report by Reuters.
A final decision is yet to be taken by the National Payments Corporation of India (NPCI), but a decision is expected in the coming days, the report said.
The proposed delay would give payment firms more time to upgrade their systems and could help avoid passing the additional costs on to customers during the festive season, it added.
The government had proposed 0.4% MDR on eligible merchant transactions above ₹2,000, while transactions up to ₹2,000 would remain free. The charge was scheduled to begin on October 15, coinciding with India's annual festive period, when consumer spending typically rises.
Delaying the implementation could also address concerns among retailers during the festive season, per the Reuters report. The industry executive cited in the report said the fee could instead be introduced from January.
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Shares of digital payments companies fell on Thursday following the report. Paytm declined 5.5%, Mobikwik fell 7% and Pine Labs dropped 3%, per Reuters.
GTRI Seeks Withdrawal Of UPI Fee
The possible delay comes amid calls for the government to scrap the proposed MDR altogether. The Global Trade Research Initiative (GTRI) had urged the government to withdraw the changes and retain free UPI payments for merchants and consumers.
GTRI also called for an independent audit of UPI's actual operating costs, with the government, banks, NPCI and payment apps sharing the expense through a transparent funding arrangement.
"The government should withdraw the proposed UPI changes scheduled to take effect on October 15 and keep UPI free for merchants and consumers. Charging merchants could raise prices, squeeze small-business earnings and weaken household demand," GTRI founder Ajay Srivastava said in the report.
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"It would also reduce UPI’s price advantage over cards, benefiting US card networks and payment platforms," he added.