{"id":124707,"date":"2026-10-15T10:40:49","date_gmt":"2026-10-15T05:10:49","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=124707"},"modified":"2026-10-15T10:42:29","modified_gmt":"2026-10-15T05:12:29","slug":"upi-mdr-2026","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/upi-mdr-2026\/","title":{"rendered":"UPI Merchant Charges Above \u20b92,000, New MDR Rules After Diwali"},"content":{"rendered":"

National Payments Corporation of India (NPCI) has deferred the implementation of the proposed 0.4% Merchant Discount Rate (MDR) on selected UPI person-to-merchant (P2M) transactions above \u20b92,000<\/strong>. The framework was originally scheduled to take effect on October 15, 2026. On October 13, NPCI announced that the revised charges would be implemented immediately after Diwali, with the exact date to be notified separately. The decision aims to provide relief to merchants during the festive shopping season.<\/p>\n

What is UPI MDR?<\/b><\/h2>\n

Merchant Discount Rate (MDR)<\/b> is a fee associated with accepting digital payments. It is generally paid within the payment ecosystem by the <\/span>merchant side<\/b> and is distributed among participating entities such as banks, payment service providers and payment application providers.<\/span><\/p>\n

In the case of UPI, MDR is being introduced for a specified category of <\/span>person-to-merchant transactions above \u20b92,000<\/b>. It is important to note that MDR is <\/span>not a tax collected by the government<\/b>. The revenue remains within the payment ecosystem to support its functioning and expansion.<\/span><\/p>\n

Why has NPCI Introduced MDR on UPI Transactions?<\/b><\/h2>\n

UPI has grown into a large-scale digital payment infrastructure handling billions of transactions every month. With the expansion of the network, payment infrastructure requires continued investment in <\/span>technology, cybersecurity<\/a>, fraud prevention, server capacity and customer support<\/b>.<\/span><\/p>\n

The new MDR framework provides a revenue mechanism within the payment ecosystem while keeping everyday low-value transactions free. NPCI and the government have also emphasised the need to protect <\/span>small merchants and ordinary users<\/b> from additional costs.<\/span><\/p>\n

Major reasons behind the introduction of MDR<\/b><\/h3>\n