UPI Merchant Transaction Fee Delayed Until After Diwali 2026

The proposed 0.4% Merchant Discount Rate (MDR) fee on certain UPI merchant transactions in India has been postponed until after Diwali 2026, according to the provided news report. The National Payments Corporation of India (NPCI) had previously announced October 15, 2026, as the implementation date. The revised date has not yet been announced.

Who Will Be Affected by the Fee?

The proposed 0.4% MDR fee applies to eligible person-to-merchant (P2M) UPI transactions above ₹2,000. For eligible transactions worth ₹75,000 or more, the maximum fee is capped at ₹300. Certain eligible small merchants are exempt from the proposed charges.

Will Customers Have to Pay the Fee?

The proposed MDR fee is payable by merchants, not individual customers. Person-to-person (P2P) UPI transactions will continue to remain free. Merchant transactions of up to ₹2,000 are also subject to specified exemptions.

Key Details

• Previously Announced Implementation Date: October 15, 2026

• Revised Implementation Timeline: After Diwali 2026

• Proposed MDR Rate: 0.4% on eligible transactions

• Maximum Fee: ₹300 for eligible transactions of ₹75,000 or more

• New Implementation Date: Yet to be announced

The postponement is intended to avoid introducing the proposed charges during the festive period. Merchants and businesses using UPI payments should watch for an official announcement confirming the revised implementation date.

Sources mentioned in the original report: NPCI-related announcement, The New Indian Express, and The Economic Times.