The proposed UPI merchant fee on select payments above ₹2,000 will not begin on October 15 as previously planned. The National Payments Corporation of India has deferred implementation until after Diwali, with the precise starting date to be notified separately.
Reuters reported the postponement on October 13. The proposal concerns a 0.4% merchant discount rate, or MDR, on specified person-to-merchant transactions—not a blanket charge on every use of UPI.
What has been postponed?
The change is to the timing of the proposed rollout. A delay is not the same as withdrawal of the policy. Financial Express’s report also says implementation has moved beyond the festival period.
- The reported rate is 0.4%.
- The reported threshold is above ₹2,000.
- The proposal applies to select merchant transactions.
- A new implementation date has not yet been specified in these reports.
Does this mean customers must pay extra?
MDR describes a merchant-side payment acceptance charge. It should not automatically be presented as a fee deducted from every customer’s bank account. The applicable transaction categories, exemptions and any rules about passing charges on need to be read in the final operational instructions.
For illustration only, 0.4% of an eligible ₹10,000 transaction would be ₹40. That calculation explains the rate; it does not establish that a particular purchase will attract the fee or that the buyer will bear it.
What merchants should check next
Businesses should look for a dated NPCI notification and guidance from their acquiring bank or payment provider before changing billing practices. A social-media message saying “all UPI payments are now charged” leaves out the threshold, the limited scope and the deferred start.
The next meaningful update will be the implementation notice, including which payments are covered and when the rule becomes effective. Until then, “after Diwali” is a timing description, not a confirmed calendar date.
Image credit and licence
Representative image of smartphone use, not a UPI transaction or the announcement. Photo: Rawpixel.com / Wikimedia Commons, CC0 1.0. Original image and provenance · Licence / usage terms.
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