NPCI defers UPI MDR rollout to post-Diwali

The National Payments Corporation of India has pushed back the introduction of a merchant discount rate on select UPI person-to-merchant transactions until after Diwali, Inc42 reported. The move follows earlier delays that postponed the rollout from October 15 to January 2027.

When we covered the January deferral on 8 October, volumes had already dipped 2% month-on-month in September, though authorities dismissed concerns that the 0.4% fee on transactions above ₹2,000 would curb adoption. The Supreme Court declined to block the measure in late September, leaving the policy intact while awaiting the Centre’s response.

NPCI Managing Director Dilip Asbe had previously argued that a market-driven economic model, including MDR, was necessary to cover rising cybersecurity and scalability costs. The repeated delays suggest persistent pushback from retailers and payment platforms, but the policy’s eventual implementation will likely force fintech firms to adjust pricing strategies and merchant acquisition tactics.

The next test will come in January, when the industry will watch for any further concessions or volume shifts.

Sources: inc42.com