PANAJI: The National Payments Corporation of India (NPCI) has postponed the implementation of the proposed Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions until after Diwali. The exact date of implementation will be announced separately.
The decision was taken by the UPI and Services Steering Committee on Tuesda, October 13, keeping the festive season in mind. The move comes amid speculation over the proposed merchant fee, which was earlier scheduled to take effect from October 15.
“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 on a date to be notified separately,” NPCI said in a statement. Diwali will be celebrated on November 8.
NPCI had announced last month that select UPI transactions above Rs 2,000 made to merchants would attract an MDR of 0.4% from October 15. The fee is payable by merchants and does not apply to person-to-person (P2P) UPI transfers. Transactions below Rs 2,000 will remain exempt from MDR, while merchants receiving less than Rs 1 lakh per month through UPI will also be exempt from the proposed charges. The 0.4% MDR on eligible P2M transactions has been capped at Rs 300 per transaction. The proposed framework also specifies a lower MDR of 0.02% for capital market transactions.
For certain public services and essential payments, a flat fee of Rs 5 has been announced for specified transactions above Rs 2,000. These include select payments for railway tickets, fuel, agricultural inputs, telecom services, utility bills, insurance premiums and taxes. The flat-fee structure is intended to contain transaction costs in sectors with thin profit margins and prevent charges from increasing with the value of payments.
