Exclusive: UPI MDR rollout likely to move to January, source says

The proposed introduction of a Merchant Discount Rate (MDR) on UPI transactions is likely to be deferred to January, as the government weighs concerns over its timing ahead of the festive season, sources told The Head and Tale.

"The MDR on UPI is likely to be shifted to January due to the festive season," a source said.

The Head and Tale was the first to tweet about this yesterday.

One of the top UPI players said that it has already started sending communications to its merchants, informing them about the merchant fees on UPI starting from October 15. "We have already sent communications to majority of our merchants."

Merchants, particularly small traders and retailers who rely heavily on UPI for everyday sales, have been vocal in their opposition ever since the MDR on UPI has been announced. 

The postponement is being driven by growing unease among merchants over the proposed charges. There are concerns that introducing MDR now could disrupt business during the peak festival period, when digital payments see their highest volumes of the year.

No official announcement has been made so far. This story will be updated as more information becomes available.

On September 15, National Payments Corporation of India (NPCI) announced that starting October 15, UPI transactions above Rs 2,000 will attract a MDR of 0.4%, or 40 basis points. Person-to-person transactions remain free, as do merchant transactions up to Rs 2,000. There are also exemptions and special rates for certain categories, including a Rs 5 cap for select essential services and 0.02% for capital market transactions.

Read our deep-dive on UPI MDR.