From Financialexpress · Kshipra Petkar · · 1m 20s
MDR Rollout Delayed to January 1
India's new UPI payment fee rules may start later than planned for merchants to prepare.
In brief
India's new UPI payment fee rules may start later than planned for merchants to prepare. India's merchant discount rate framework for UPI transactions is likely to begin implementation on January 1, 2027, after being postponed from October 15 to allow merchants time for transition. Originally reported by…
MDR Implementation Date
The new merchant discount rate framework for UPI transactions may be deferred to January 1, 2027, from the earlier proposed rollout date of October 15.
Reason for Delay
The proposed deferment aims to give merchants and the payments ecosystem more time to prepare for the transition, especially during the festive season when digital payments surge.
Legal Challenge
The Supreme Court refused to stay the Centre’s decision to impose MDR on specified person-to-merchant transactions on September 28.
MDR Framework Details
An MDR of 0.4% is proposed on person-to-merchant UPI transactions above Rs 2,000, with the charge capped at Rs 300 for transactions of Rs 75,000 and above.
Payment Aggregators Negotiating
Payment aggregators are negotiating with sponsor banks for a larger share of the acquiring banks’ portion of the new MDR on UPI transactions.
RBI Governor's Stance
RBI Governor Sanjay Malhotra stated he personally does not expect the new MDR guidelines to have a major impact on transaction volumes.
The short version
India's merchant discount rate framework for UPI transactions is likely to begin implementation on January 1, 2027, after being postponed from October 15 to allow merchants time for transition.
