Home / Business and Economy / UPI MDR Deferred: Diwali Gift for Businesses
UPI MDR Deferred: Diwali Gift for Businesses
14 Oct
Summary
- UPI MDR on select P2M transactions is deferred post-Diwali.
- A 40-basis-point MDR will apply to UPI transactions over Rs 2,000.
- Government previously compensated banks via incentive schemes.
The implementation of Merchant Discount Rate (MDR) on select UPI person-to-merchant (P2M) transactions has been deferred until after Diwali. This decision by the UPI and Services Steering Committee aims to provide businesses and payment firms with additional preparation time.
Originally scheduled for October 15, the levy will now be implemented after the festive period concludes on November 8. A rate of approximately 40 basis points is set to apply to eligible bank account-to-merchant UPI transactions exceeding Rs 2,000.
Smaller transactions and certain merchant categories will continue to be exempt from this charge. Merchant associations had requested a postponement during the festive season, a higher small-merchant exemption threshold, and exclusion of merchant-to-merchant payments.
The government previously supported the digital payment ecosystem by compensating banks and payment companies through an incentive scheme for low-value UPI and RuPay debit-card transactions.
