NPCI defers 0.4% UPI merchant fee until after Diwali
Festive relief for retailers as UPI MDR rollout moves beyond Diwali: NPCI to notify a date later
The National Payments Corporation of India has officially deferred the rollout of a 0.4 percent merchant discount rate on select person-to-merchant UPI transactions above ₹2,000 until after the Diwali festival season. Originally planned to begin on October 15, the delay provides temporary relief to retailers, restaurants, and e-commerce sellers who experience a massive surge in digital payments during the festive shopping period.
The National Payments Corporation of India has officially deferred the rollout of a 0.4 percent merchant discount rate on select person-to-merchant UPI transactions above ₹2,000 until after the Diwali festival season. Originally planned to begin on October 15, the delay provides temporary relief to retailers, restaurants, and e-commerce sellers who experience a massive surge in digital payments during the festive shopping period.
The National Payments Corporation of India has officially deferred the rollout of a 0.4 percent merchant discount rate on select person-to-merchant UPI transactions above ₹2,000 until after the Diwali festival season. Originally planned to begin on October 15, the delay provides temporary relief to retailers, restaurants, and e-commerce sellers who experience a massive surge in digital payments during the festive shopping period.
The National Payments Corporation of India (NPCI) has deferred the rollout of a 0.4 per cent Merchant Discount Rate (MDR) on select person-to-merchant UPI transactions until after Diwali, providing temporary relief to merchants and consumers during the festival shopping season. The new implementation date will be notified separately, NPCI said on Tuesday.
The UPI and Services Steering Committee took the decision “keeping in mind the festive season”, according to NPCI’s official statement. The fee had been scheduled to take effect from October 15 on merchant UPI payments above ₹2,000, but the payment-network operator has now pushed the change beyond Diwali.
The 0.4 per cent MDR would apply to eligible merchant transactions, not person-to-person transfers such as sending money to family or friends. For merchants, a payment of ₹5,000 could carry an MDR of ₹20, subject to the final operational rules and merchant arrangements when NPCI announces the implementation date.
The deferral is particularly relevant for retailers, restaurants, e-commerce sellers and other small businesses that see a sharp jump in digital transactions during Diwali.
India’s festival season has become a major sales window for consumer electronics, clothing, jewellery, groceries and online commerce, with UPI increasingly serving as the default payment method for many customers.
NPCI’s release does not say whether the MDR framework itself will change, whether there will be exemptions for specific merchant categories, or whether merchants will be allowed to pass the charge on to customers.
It only confirms that MDR on “select” person-to-merchant transactions will be implemented immediately after Diwali on a date to be notified separately.