Archive · 8 Oct 2026
Traders Seek Delay to Proposed UPI Charges Until 2027
Some trader groups want the government to wait before starting new charges on certain UPI payments.
They wrote to Finance Minister Nirmala Sitharaman and asked to move the start date from October 15 to January 1, 2027.
They say many merchants are still unsure how the charges would work.
The proposed charge would apply only to certain business payments above Rs 2,000.
Most UPI payments between people and businesses are expected not to be charged under the plan.
Small merchants using the P2PM model would continue to pay no MDR.
The trader groups also plan to explain the proposal to merchants across the country.
Customers would not face a monthly limit on free UPI use, and banks have been advised to prevent merchants from adding the charge to customers' bills.
Trader organisations have asked Finance Minister Nirmala Sitharaman to delay proposed UPI merchant charges from October 15 to January 1, 2027.
They say merchants need more clarity about the proposed Merchant Discount Rate (MDR) and more time to prepare.
The proposal sets a 0.4% MDR on specified person-to-merchant UPI transactions above Rs 2,000, capped at Rs 300 for transactions of Rs 75,000 or more.
More than 95% of UPI person-to-merchant transactions are expected to remain outside the framework, while small merchants using the P2PM model retain zero MDR.
Trader organisations plan a nationwide awareness campaign; consumers will have no monthly cap on free UPI use, and banks have been advised against merchants passing MDR costs to customers.
- Who
- Trader organisations have asked Finance Minister Nirmala Sitharaman to delay the proposed MDR rollout.
- What
- They seek to move the proposed start date from October 15 to January 1, 2027, and plan a nationwide awareness campaign.
- When
- The proposed implementation date is October 15; trader organisations requested January 1, 2027, instead. The request comes ahead of the festive season.
- Where
- The request was made to the Finance Minister in India; the planned awareness campaign is nationwide.
- Why
- Trader organisations say merchants remain unclear about the proposed charges and need more time to understand and prepare for the system.
Trader organisations
Proposed framework
Timing of the rollout
Trader organisations
Trader organisations want implementation delayed until January 1, 2027, saying merchants need more time and clarity, particularly ahead of the festive season.
Proposed framework
The proposed framework is scheduled to take effect on October 15; the article says the revised rates are expected to remain lower than charges generally applicable to cards and digital wallets.
Merchant readiness and intended support
Trader organisations
Trader organisations say confusion among merchants remains and plan a nationwide awareness campaign.
Proposed framework
The framework allocates 5% of total MDR collections to a dedicated fund for UPI acceptance among small merchants, with collections also shared among ecosystem participants and expected to support expansion, cybersecurity and innovation.
- Requested delay
- From October 15 to January 1, 2027
- Proposed standard MDR
- 0.4% on specified person-to-merchant UPI transactions above Rs 2,000
- MDR cap
- Rs 300 per transaction for transactions of Rs 75,000 and above
- Transactions outside framework
- More than 95% of UPI person-to-merchant transactions are expected to remain outside it
- Small merchants
- Merchants using the P2PM model will continue to receive zero MDR
- Selected categories
- Railway, telecom, insurance and fuel payments above Rs 2,000 would attract a flat Rs 5 MDR
- Capital-market payments
- Proposed MDR is 0.02%, capped at Rs 300 per transaction
- Consumer UPI use
- No monthly quota or cap on free UPI usage is proposed