The implementation of Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions has been deferred until after Diwali, following a decision by the UPI and Services Steering Committee on Tuesday dtd: 13th October 2026.
The committee decided to postpone the implementation, keeping in mind the ongoing festive season and its impact on merchants and consumers. The revised implementation date will be announced separately.
UPI MDR Implementation Deferred Until After Diwali
The decision provides temporary relief to merchants during the festive period, when UPI payments typically play an important role in retail purchases, online shopping and other consumer transactions.
Merchant Discount Rate (MDR) is a fee associated with the processing of merchant payments. Its application to select UPI transactions could affect the cost of accepting digital payments for eligible merchants, depending on the applicable terms.
By postponing the implementation until after Diwali, the committee has sought to avoid introducing the proposed change during a period of heightened commercial activity.
UPI MDR on Select Merchant Transactions Shall be Implemented Post Diwali Press Release Link: https://t.co/5KMjOP0tHd https://t.co/pD8IKfN6sR
— NPCI (@NPCI_NPCI) October 13, 2026
When Will UPI MDR on Select P2M Transactions Take Effect?
As per the announcement dated 13th October 2026, MDR on select Person-to-Merchant UPI transactions will be implemented immediately after Diwali.
However, the committee has not announced a specific effective date. The exact date will be notified separately.
Until further details are announced, merchants and other stakeholders should monitor official communications for clarification regarding the implementation timeline and the transactions covered by the proposed MDR.
What Should Merchants and Businesses Know?
The announcement relates specifically to select Person-to-Merchant (P2M) UPI transactions. It does not establish that MDR will apply to all UPI payments.
Merchants, payment service providers and businesses should therefore wait for the detailed notification before drawing conclusions about the applicable transaction categories, charges or implementation requirements.
The postponement changes the implementation timeline, while the precise scope and effective date will depend on the subsequent announcement.
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