Will MDR Be Postponed To January 2027?

Speculation is rife that the Centre would postpone implementation of the merchant discount rate (MDR) on transactions above Rs 2000 from October 15. It is being said that the government may postpone its implementation to January 27.

Members of the UPI and Services Steering Committee, headed by NCPI, met on Wednesday to discuss the rollout and clarify the doubts being expressed by various stakeholders. The feeling among the official circles is that a deferment would keep eligible merchant payments free of MDR during the festive season.

The committee is also considering exempting businesses with annual turnover of up to ₹40 Lakh, sources said.

This would significantly expand the proposed exemption from the earlier framework, under which small merchants receiving up to ₹1 Lakh a month through UPI QR codes would be spared from the fee.

MDR is a fee merchants pay for processing digital payments. Under the announced framework, a 0.40% charge would apply to eligible person-to-merchant (P2M) UPI transactions above ₹2,000, capped at ₹300 per transaction.

Various trade bodies had approached the government to postpone the implementation of the decision. Government sources however said no final decision has yet been taken.