UPI Merchant Discount Rate (MDR) Roll-out May Be Deferred To January 2027

The introduction of MDR (Merchant Discount Rate) on selected UPI transactions maybe deferred from October 15^th to January 1^st 2027. It is currently under consideration by the National Payments Corporation of India (NCPI) and the government.

Why The Roll out Could Be Delayed :

According to India Today report, many payment industry bodies and merchants have asked NCPI to postpone the implementation of the new 0.4% Merchant Discount Rate (MDR) until the festive season is over. They raised serious concern that introducing a 0.4% processing fee on transaction above 2000 Rs would increase immediate transaction coast, heavily impacting operating retail traders during this peak festive shopping seasons.

While some sources also confirmed that the government is  concerned that these added costs could either weaken consumer or it might passes down to customers at the time when inflation is already putting a pressure on a consumer.

Retailers Push Back Against MDR (Merchant Discount Rate)

According to Inch 42 report, Retail Trader Associations like, All India Mobile Retailer Associations (AIMRA) and All India Consumer Products Distributors Federation (AICPDF) strongly opposed the sudden introduction of 0.4% fee on transactions above 2000 fearing impact on thin profit.  

Lastly, On Wednesday 7^th of October, RBI Governor Sanjay Malhotra said that, he does not expect the small MDR fee to have a major impact.

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