UPI MDR Decision Today: October 15 Rollout May Be Delayed To January 2027; NPCI Meeting In Focus

The rollout of the new UPI merchant discount rate (MDR), scheduled to take effect from October 15, could be postponed to January 2027, with a decision expected on Friday, October 9, after a meeting of the NPCI-led UPI Steering Committee.

The committee is expected to meet in the first half of Friday, while an announcement on the proposed postponement could come around 1–2 pm, Moneycontrol reported, citing sources. The meeting comes less than a week before the new UPI MDR framework is due to take effect.

Under the proposed framework, an MDR of 0.4%, or 40 basis points, will apply to specified person-to-merchant UPI transactions above ₹2,000. The charge will be borne by merchants and not customers, meaning users will not directly pay the MDR for making eligible UPI payments. Person-to-person UPI transfers will continue to remain free.

The possible delay has also put Paytm, MobiKwik and Pine Labs in focus after shares of the three digital payments companies fell sharply on Thursday as investors reassessed when the new UPI merchant fee could begin contributing to their revenue.

Will UPI MDR Be Postponed To January 2027?

The UPI MDR is currently scheduled to take effect from October 15, but the rollout could be pushed to January 2027 if the Steering Committee agrees to the proposed deferment.

Industry participants have sought additional time to prepare for the new framework, with the implementation timeline now set to be discussed at Friday's meeting.

Finance Minister Nirmala Sitharaman on Thursday said stakeholders would decide when MDR should be levied on UPI transactions.

A postponement would not scrap the new MDR framework. Instead, it would delay its implementation from the currently scheduled October 15 date.

The proposed MDR marks a change for India's UPI ecosystem, where merchant payments have operated under a zero-MDR regime.

Under the new framework, the 0.4% charge will apply to specified person-to-merchant transactions above ₹2,000. Person-to-person transfers and eligible smaller merchant transactions will remain outside the levy.

Will Customers Have To Pay UPI Charges?

The proposed MDR will be charged to merchants rather than customers. Consumers making UPI payments will therefore not directly pay the 0.4% MDR.

For a transaction of ₹10,000 that falls under the new framework, for instance, the 0.4% MDR would amount to ₹40. This would be a merchant-side charge rather than an additional ₹40 collected from the customer for making the UPI payment.

The framework is also important for payment companies because it would create a revenue stream from eligible UPI merchant transactions that were previously free.

That expectation came under pressure in the stock market on Thursday after reports emerged that implementation could be delayed. Shares of One97 Communications, which operates Paytm, hit the 10% lower circuit, while MobiKwik and Pine Labs also fell sharply.

The focus now shifts to the NPCI-led Steering Committee meeting and whether the October 15 implementation date will remain unchanged or be pushed to January 2027.

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