New Delhi, October 8 (Daily Kiran) : Merchant organizations in New Delhi have called on the National Payments Corporation of India (NPCI) to postpone the new UPI Merchant Discount Rate (MDR) framework, which is set to take effect on October 15. This request comes as the festival season approaches, with concerns that the new charges could negatively impact sales during this critical time.
According to a report by NDTV Profit, these organizations have expressed that implementing the framework now could harm their sales during the festive period and into the early months of the following year. The proposed changes include a uniform fee of ₹5 for UPI transactions exceeding ₹2,000 in select merchant categories, alongside a 0.4% charge on larger person-to-merchant (P2M) payments, capped at ₹300.
NPCI estimates that these adjustments will affect only 4% of merchant transactions, leaving over 95% of person-to-merchant UPI payments unaffected by the MDR framework. Small merchants using the peer-to-peer (P2P) model will continue to benefit from a zero MDR policy.
For everyday users, there will be no monthly quota or limit on free UPI usage, allowing them to conduct transactions without incurring any MDR charges under the established free framework.
To further promote UPI usage among small traders, the new framework includes a special fund, allocating 5% of total MDR collections. This revenue will be shared among various companies, aimed at enhancing UPI expansion, cybersecurity, and innovation.
Additionally, NPCI has instructed banks to ensure that merchants do not pass the burden of these MDR charges onto customers.
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