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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Updated October 13, 2026: The National Payments Corporation of India (NPCI) has postponed the planned rollout of merchant discount rate (MDR) on selected UPI merchant payments until after Diwali 2026. NPCI said it will communicate the final implementation date to stakeholders. The plan had been scheduled to start on October 15, but no replacement date has been announced.
When will UPI MDR charges start?
There is no confirmed start date. NPCI’s October 13 postponement moves implementation beyond Diwali 2026, but the available announcement does not specify whether the framework will begin later in November, in December, or at another time. Readers should treat October 15 as the cancelled target date, not as a date when charges began.
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The delay came as merchants entered the festive sales period. The Economic Times reported that merchant associations, including the All India Mobile Retailers Association and the All India Consumer Products Distributors Federation, had sought more time. That is the reported industry explanation; NPCI’s timing announcement did not establish a definitive reason beyond confirming the postponement.
Were UPI charges delayed until after Diwali?
Yes. The postponement applies to the proposed MDR framework for selected merchant transactions. It does not mean that every UPI payment was going to become chargeable, and it does not create a new fee for ordinary person-to-person transfers.
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What the earlier MDR plan would have covered
The terms reported before the delay described MDR as a merchant-side fee on eligible bank-account-funded person-to-merchant (P2M) UPI payments above ₹2,000. The reported rate was 0.4%, with a maximum of ₹300 per transaction. These were announced framework terms before implementation was postponed; they should not be read as charges currently in force.
| Payment situation | Earlier announced treatment | Status after October 13 postponement |
|---|---|---|
| Person-to-person transfer | Free | No change announced; MDR rollout postponed |
| P2M payment of ₹2,000 or less | Free | No change announced; MDR rollout postponed |
| Eligible bank-account-funded P2M payment above ₹2,000 | 0.4% MDR, capped at ₹300 per transaction | Proposed framework postponed; final date not stated |
| Qualifying small merchant | Zero-MDR exemption described in the September clarification | Framework postponed; final eligibility operation awaits implementation details |
| Specified sectors above ₹2,000 | ₹5 flat MDR, according to the September Finance Ministry clarification | Reported sector treatment remains part of the postponed framework |
Will customers pay MDR on UPI?
The September Ministry of Finance clarification said MDR was not to be passed on to consumers. It also said app providers could not impose platform fees or hidden charges under the described framework. The government’s August 8, 2026 policy summary stated: “Consumers making payments will not face any transaction charges.”
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That distinction matters: MDR is a fee associated with processing a merchant transaction, while the customer pays the amount shown at checkout. A merchant or payment participant cannot treat the announced MDR as permission to add a separate surcharge to the customer under the clarification. Because the rollout is postponed, the practical operation of these rules will depend on NPCI’s final communication and any revised terms.
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News On AIR’s report on the September clarification named railways, telecom, insurance, fuel and agricultural inputs as sectors subject to a flat ₹5 MDR on transactions above ₹2,000. The October postponement report did not independently reconfirm each sector or indicate whether those categories will change. The ₹5 figure therefore belongs to the earlier announced framework, not a fee consumers should assume is currently being collected.
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Are UPI payments above ₹2,000 still free?
For now, the postponed rollout means the proposed MDR is not established as an active new charge on those transactions. Under the earlier plan, however, an eligible bank-account-funded merchant payment above ₹2,000 was the category intended for MDR. “Free” must also be separated by payment type: person-to-person transfers and payments up to ₹2,000 were described as remaining free, while qualifying small merchants were to receive a zero-MDR exemption.
How many transactions were expected to be unaffected?
Government sources cited by News On AIR estimated that about 96% of UPI merchant transactions would remain unaffected. That is an attributed government estimate, not an independent calculation supplied with the postponement report. It also describes the expected reach of the earlier framework and should not be treated as a measurement of transactions after a future rollout.
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Why was MDR proposed?
The government presented the policy as a way to support UPI’s long-term sustainability and fund continuing investment in payment infrastructure, cybersecurity, fraud prevention and network expansion. Those are stated policy objectives, not evidence that the postponed framework has already produced those outcomes.
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What remains unknown
- NPCI has not published a replacement implementation date in the October 13 report.
- The complete statutory amendment and underlying NPCI circular were not available for a legal interpretation of how the fee would operate.
- A Department of Financial Services FAQ is listed as a September 15, 2026 document, but the accessible listing confirms its title and date rather than the contents of its PDF.
- NPCI may provide additional timing or revised terms when it communicates with stakeholders.
What UPI users and merchants should do now
- Continue checking the amount displayed by your bank, UPI app and merchant checkout; do not assume a new MDR surcharge is valid merely because a payment exceeds ₹2,000.
- Merchants should retain records of transaction values, funding method and business category so they can map transactions to NPCI’s eventual operational instructions.
- Do not advertise October 15, 2026 as an effective date. It was the earlier target that was postponed.
- When NPCI issues a final date, verify whether the 0.4% rate, ₹300 cap, ₹5 sector fee and small-merchant exemption remain unchanged before updating billing or reconciliation systems.
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