Will the charges on UPI transactions not come into effect from October 15? Proposal sent to NPCI to defer the move..
The implementation of the MDR charge on UPI transactions exceeding ₹2,000—scheduled for October 15—could be deferred this year. Merchant associations have submitted a proposal to the NPCI regarding this matter. They have requested that the UPI-MDR charge be postponed until after the festive season, or specifically until December 31, suggesting instead that the charge be implemented from the beginning of next year.
However, the NPCI has not yet taken a decision on the issue following consultations with stakeholders; this information was obtained by NDTV from sources. If the merchants' proposal is accepted, it would provide significant relief to traders during the festive season, a period marked by bumper sales and a high volume of UPI-based shopping.
**Request Made to the Finance Minister**
A source from the trading community informed NDTV that merchant associations have urged the Finance Minister to defer the imposition of MDR on UPI transactions. Traders have appealed to the Minister to postpone the proposal regarding MDR on UPI 'person-to-merchant' transactions by six weeks.
In a written memorandum submitted to the Finance Minister, merchant associations stated that there is uncertainty among traders regarding the MDR. Consequently, they have requested that the implementation date be shifted from October 15 to January 1, 2027.
**What is the Proposal Regarding the UPI-MDR Charge?**
According to the NPCI, an MDR charge of 0.4% is set to be applied to 'person-to-merchant' transactions exceeding ₹2,000. Based on this calculation, the charge on a transaction of ₹75,000 would amount to ₹300. However, the maximum MDR limit has been capped at ₹300 per transaction.
Consequently, for any transaction exceeding ₹75,000, the maximum MDR charge of ₹300 will apply.
No MDR on transactions above ₹2,000?
MDR will apply only to specific Person-to-Merchant (P2M) transactions exceeding ₹2,000. The standard rate will be 0.4%, while the maximum MDR for transactions of ₹75,000 or more will be ₹300.
For transactions exceeding ₹2,000 in essential sectors such as railways, telecom, insurance, fuel, and agricultural inputs, there will be a flat MDR of ₹5.
Crucially, the MDR will not be charged to the customer; banks have been instructed to ensure that merchants do not pass this burden on to customers.
No MDR on 96% of UPI merchant transactions
According to the government, approximately 96% of UPI merchant transactions will remain unaffected by MDR. MDR will be zero for all UPI merchant payments up to ₹2,000.
Additionally, Person-to-Person (P2P) UPI payments of any amount will remain free. Small merchants will not be charged MDR on payments of up to ₹1 lakh per month received via UPI QR codes. MDR will also be zero on RuPay debit card transactions.
Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
