Regulatory
UPI Merchant Discount Rate Rollout May Be Deferred to January 1
8 October 2026 · www.business-standard.com
The proposed merchant discount rate (MDR) on UPI peer-to-merchant transactions may be postponed until January 1, giving a breather during the festival season. Consumers will not bear any MDR; it applies to merchants on transactions above ₹2,000.
Points to Remember
- MDR of 0.40% proposed on UPI P2M transactions above ₹2,000, capped at ₹300.
- Bill payments, utilities, education and fuel categories to attract flat ₹5 per transaction above ₹2,000.
- Consumers will not pay any MDR on UPI transactions.
- UPI recorded average 802 million transactions per day in September.
- September UPI volume 24.07 billion (up 22.6% YoY); value ₹29.37 trillion (up 18% YoY).
Why it matters
Merchants may see a short reprieve from MDR charges until January, so merchant queries about fee applicability on high-value UPI collections could come up. Meanwhile, record UPI volumes mean sustained transaction processing load on bank systems.
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