Archive · 8 Oct 2026
UPI Merchant Fee May Be Deferred as Traders Seek Rollback
A fee for some UPI payments was planned to begin on October 15.
Reports say it may instead start on January 1, 2027, but NPCI has not made a final decision.
The proposed standard fee is 0.4% when a customer pays a merchant more than Rs 2,000.
Some small merchants would be exempt.
Certain types of businesses would have different fees, and very large purchases would have a set charge.
Traders worry the fee could make business harder during the festive season.
Payment companies say they need time to update their systems.
Trader groups have asked for changes, including higher limits for when the fee applies.
Reports say NPCI may delay the proposed UPI MDR rollout from October 15 to January 1, 2027; no final decision has been announced.
The proposed standard charge is 0.4% on person-to-merchant UPI payments above Rs 2,000, with some small merchants exempt.
The proposal also sets a Rs 300 fee for purchases of Rs 75,000 or more and a flat Rs 5 fee for certain categories above Rs 2,000.
Trader groups cite festive-season costs and pressure on sales, margins and cash flows; CAIT has requested higher thresholds and exemptions.
Payment companies have also sought a delay to upgrade their systems, while discussions are reported to be underway with the Finance Ministry.
- Who
- NPCI, merchants and trader associations, payment companies, and the Ministry of Finance.
- What
- A proposed MDR charge on some UPI merchant payments may be delayed from October 15 to January 1, 2027; a final decision is pending.
- When
- The proposed rollout date is October 15; reports expect an announcement in the coming days and a possible delay until January 1, 2027.
- Where
- India.
- Why
- Merchants and trade associations cite festive-season business pressures, while payment companies say they need time to upgrade their systems.
Arguments for delaying or changing the fee
Operational reasons for a delay
Cost to merchants and festive-season timing
Arguments for delaying or changing the fee
Trader groups say the fee would add pressure during the October-to-December festive period, when many transactions exceed Rs 2,000, and amid difficult sales, margins and cash flows.
Operational reasons for a delay
The articles do not report a defense of imposing the fee on schedule; they say payment companies requested a deferral and cited the need to upgrade their systems.
Scope and thresholds
Arguments for delaying or changing the fee
CAIT seeks a Rs 10,000 transaction threshold, a Rs 10 lakh small-trader exemption limit, and clarification of merchant-to-merchant payments to avoid possible multiple charges.
Operational reasons for a delay
The announced proposal sets a standard 0.4% MDR above Rs 2,000, with specified exemptions and separate fees for certain transactions and merchant categories.
- Proposed standard MDR
- 0.4% on person-to-merchant UPI transactions above Rs 2,000.
- Proposed rollout date
- October 15.
- Reported possible start
- January 1, 2027; NPCI has not made a final decision.
- Small-merchant exemption
- Merchants with monthly UPI QR receipts below Rs 1 lakh are exempt, according to the first article.
- High-value purchases
- Transactions of Rs 75,000 and above are reported to attract Rs 300 per transaction.
- Specified merchant categories
- Railways, telecom services, insurance and fuel are among categories reported to face a flat Rs 5 fee for transactions above Rs 2,000.
- CAIT requests
- Raise the MDR threshold to Rs 10,000 and the small-trader exemption limit to Rs 10 lakh.
