India’s six-year run of zero merchant fees on UPI payments will continue through the festive season after all. On 13 October 2026, the National Payments Corporation of India announced that a planned 0.4% Merchant Discount Rate on select Person-to-Merchant UPI transactions above ₹2,000 — originally due to begin on 15 October 2026 — has been deferred until after Diwali, which falls on 8 November 2026. Understanding the UPI MDR deferral in full requires looking at these details closely.
The UPI MDR deferral was confirmed in an official NPCI press release and reported by multiple Indian outlets. This article walks through what was actually announced, who it affects, and what the directory data at gf6.com shows about the banking network that settles these payments across banks in India.
What NPCI actually announced — UPI MDR deferral
According to the NPCI release, the UPI and Services Steering Committee resolved to postpone the start of the new merchant fee regime. In the words of the committee, “keeping in mind the festive season, Merchant Discount Rate (MDR) on select Person-to-Merchant (P2M) UPI transactions, shall be implemented immediately post Diwali.” The revised implementation date is to be notified separately. These figures put the UPI MDR deferral into clearer perspective.
The key parameters of the deferred charge, as published, are summarised below.
| Item | Detail |
|---|---|
| Original start date | 15 October 2026 |
| New status | Deferred until after Diwali (8 November 2026); revised date to be notified separately |
| MDR rate on eligible transactions | 0.4% |
| Transaction threshold | Applies to UPI P2M transactions above ₹2,000 |
| Fee cap | ₹300 for transactions of ₹75,000 and above |
| Who pays | Merchants (not customers) |
| Exempt | P2M transactions up to ₹2,000 and all person-to-person (P2P) payments |
| Share of UPI P2M volume exempt | More than 95% of P2M transactions by count (those up to ₹2,000) |
| Announcing body | NPCI UPI and Services Steering Committee |
| Announcement date | 13 October 2026 |
What it means for merchants and the payments stack
The headline point is narrow but important: no new UPI merchant fee will be charged during India’s biggest shopping weeks of the year. Trade bodies including the Confederation of All India Traders (CAIT) and the Federation of Retail Traders Welfare Association (FRTWA) welcomed the deferral, citing concerns about imposing new merchant costs during the peak festive shopping season. This context matters for anyone following the UPI MDR deferral.
It is also worth being precise about the scope. The planned MDR would have applied only to transactions above ₹2,000, and NPCI itself notes that more than 95% of UPI P2M transactions by count fall at or below that threshold. In other words, the vast majority of small daily payments — the chai, the auto fare, the kirana bill — would have remained free even once the new rule took effect. The change is targeted at larger ticket sizes, where the merchant, not the customer, would absorb the 0.4% cost up to the ₹300 cap. It is a central thread in the wider UPI MDR deferral.
For banks, fintech acquirers and payment aggregators, the deferral delays — but does not cancel — a landmark reversal of the zero-MDR regime that has defined UPI since its earliest years. The deferral was independently reported by multiple outlets, including Free Press Journal and Punekar News.
Any broader interpretation of what this means for revenue models or the long-term direction of UPI pricing is widely seen as speculative at this stage, because NPCI has not published the revised implementation date or confirmed whether the parameters will remain unchanged. Such details shaped how the UPI MDR deferral unfolded.
Explore the full data behind this article: bank branches worldwide and ATMs worldwide in the gf6.com directory.
Methodology
The primary source for this article is the NPCI press release dated 13 October 2026, published by the National Payments Corporation of India: NPCI official release (PDF). Corroborating coverage was reviewed from Free Press Journal and Punekar News.
Every figure and date reproduced above — the 0.4% rate, the ₹2,000 threshold, the ₹300 cap at ₹75,000, the 15 October 2026 original start date, the 8 November 2026 Diwali reference, the 95%+ volume share — is quoted from, or directly summarised from, that official release. For context on the Indian banking network that processes and settles UPI flows, gf6.com maintains a global directory of bank branches and ATMs; this news piece does not add any proprietary figures of its own. This is one of the defining aspects of the UPI MDR deferral.
Frequently asked questions
What exactly did NPCI defer on 13 October 2026?
NPCI deferred the planned introduction of a Merchant Discount Rate on select Person-to-Merchant UPI transactions. The MDR had been scheduled to start on 15 October 2026 and will now be implemented after Diwali on 8 November 2026, with the revised date to be notified separately.
How much was the MDR going to be?
The planned charge was 0.4% on eligible UPI P2M transactions above ₹2,000, capped at ₹300 for transactions of ₹75,000 and above. The fee was to be paid by merchants, not customers.
Will small UPI payments ever be charged?
Based on this announcement, no. Transactions up to ₹2,000 and all person-to-person payments remain exempt. NPCI noted that transactions up to ₹2,000 account for more than 95% of UPI P2M volumes by count.
Who welcomed the deferral?
Trade bodies including the Confederation of All India Traders (CAIT) and the Federation of Retail Traders Welfare Association (FRTWA) welcomed the move, citing concerns about adding merchant costs during the peak festive shopping season.
When will the MDR actually start?
NPCI has said only that it will be implemented immediately after Diwali. A specific revised date has not been published and will be notified separately.
Does this change what a customer pays at a UPI QR code?
No. The MDR, when it is eventually introduced, is a merchant-side charge. Customers are not billed any UPI fee under the parameters announced.
This article was produced with AI assistance from publicly available sources and is handled under our editorial standards and AI policy.
I have been online since 1995. For many years, I worked in the e-commerce sector, setting up several online shops, and have always been interested in data analysis. In 2007, I moved to the Seychelles to work from there or as a digital nomad. In recent years, I have increasingly specialised in the financial sector. I manage the Seychelles’ Commercial Register and am also very familiar with the offshore world. GF6.com is a project I have been working on for many years. I built and curated the 445,000-entry bank database myself over a period of six years, and for the past two years or so I have also been using AI to achieve better structures.
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