UPI MDR to be implemented after Diwali

The UPI MDR rollout is being deferred beyond October 15. The National Payments Corporation of India (NPCI) today communicated this to all third-party app providers (TPAPs) and banks, two sources told The Head and Tale.

NPCI has not yet communicated a new date for the MDR to come into effect. However, sources said that if the rollout does not happen in January, the plan is to push it to at least after Diwali. 

An official note on this is expected shortly.

At the time of publishing this story, NPCI has issued an official note: "UPI and Services Steering Committee today decided that, keeping in mind the festive season, Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions, shall be implemented immediately post Diwali at a date to be notified separately."

On this, traders' body CAIT's national joint general secretary Sumit Agarwal, who said CAIT delegation met the Finance Minister on 30th September and urged for deferment said, "We are grateful to the Hon’ble Prime Minister and the Hon’ble Finance Minister for understanding the concerns of traders and deferring the proposed MDR charges during this critical festive season. This decision will help preserve traders’ confidence in digital payments and reinforce the partnership between the Government and the trading community in building a stronger, more inclusive digital India.

On October 7, The Head and Tale exclusively reported that the UPI MDR rollout was likely to move to January. On Thursday, we reported that a decision to postpone had been finalised, with a formal notification expected soon.

A source then told us, "While there has been a lot of uncertainty, the overall sentiment suggests the implementation is likely to be pushed back, at least till Diwali," one source said. Another source said a deferral till January is “very likely.”

On October 9, we reported that PhonePe officials had met government officials on Thursday evening and were opposed to any deferral. NPCI also held several meetings with various government departments, and an NPCI Steering Committee meeting was called off on Friday.

Even so, NPCI held a meeting with all UPI apps and banks on Friday evening, where it said, “We are all ready to implement UPI MDR on October 15,” a source had told us then. 

Today’s communication marks a reversal of that stance.