MDR on Select UPI Transactions to Be Implemented After Diwali
MDR on Select UPI Transactions to Be Implemented After Diwali
Koshi Zone, Saharsa: The National Payments Corporation of India (NPCI), which operates the country’s digital payment system, has postponed the implementation of the Merchant Discount Rate (MDR) on select merchant transactions until after Diwali. In an announcement issued on Tuesday, October 13, 2026, NPCI stated that the decision was taken keeping the festive season in mind.
The MDR on selected Person-to-Merchant (P2M) UPI transactions will now be implemented immediately after Diwali. The effective date will be notified separately.
According to NPCI, the decision was taken during a meeting of its UPI and Services Steering Committee. Considering the increase in shopping and digital payment activities in markets during the festive season, the timeline for implementing MDR has been revised.
However, the corporation has not yet clarified which categories of merchant transactions will be covered under the proposed rate or what the applicable rate will be.
What Is MDR and Who Will Be Affected?
The Merchant Discount Rate (MDR) is a fee that may be charged to merchants for processing digital payments. Its actual impact will depend on the transactions to which the fee applies, the rate prescribed, and the rules governing its implementation.
According to NPCI’s announcement, the proposed arrangement will not apply to all UPI transactions but will be limited to selected merchant transactions.
NPCI’s Key Role in the Digital Payments Ecosystem
The National Payments Corporation of India plays a significant role in operating retail payment and settlement systems across the country. Established on the initiative of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), NPCI operates UPI, RuPay, IMPS, NACH and other payment services.
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