UPI MDR Fee Decision Postponed, Merchants Breathe a Sigh of Relief Ahead of Festival Season

New Delhi, October 14 (Daily Kiran) : The National Payments Corporation of India (NPCI) has announced a delay in implementing the Merchant Discount Rate (MDR) on UPI transactions, much to the relief of merchants as the festive season approaches. Originally set to take effect on October 15, 2026, the decision has now been postponed until after Diwali, with a new date yet to be determined.

The announcement has alleviated concerns among shopkeepers, many of whom had begun to avoid accepting UPI payments or had even started removing QR codes from their stores. Some merchants had resorted to insisting on cash payments, fearing that the new fees would impose an additional financial burden on their businesses.

With the postponement of the fee, shopkeepers are now eager to reintroduce UPI QR codes at their outlets, enabling customers to make digital payments easily. This decision is seen as a positive step for business, especially during a period when shopping activity typically surges.

Reports indicate that the proposed plan included a 0.4% MDR fee on select merchant UPI transactions exceeding ₹2,000. However, with the deadline for implementation now postponed, merchants are waiting for further clarity on the new timeline.

A shopkeeper from Lajpat Nagar in Delhi expressed that keeping UPI transactions fee-free has significantly benefited businesses. During the festive season, customers are willing to make payments through UPI without hesitation, which increases foot traffic and helps maintain normal business operations.

He praised the government’s decision, noting its positive impact. However, there remains uncertainty about the future of this arrangement and what decisions will be made regarding its continuation.

Merchants believe that UPI has become a primary mode of digital payment in the country. Imposing extra fees could adversely affect small businesses and customers alike. The postponement of the MDR fee has provided much-needed relief, allowing shopkeepers to focus on their operations during this crucial shopping season.