No additional fee for UPI transactions above Rs 2,000; decision deferred

NEW DELHI: The National Payments Corporation of India (NPCI) has deferred its decision to introduce a Merchant Discount Rate (MDR) on UPI payments above Rs 2,000 at business establishments. The new charges are now expected to be introduced after Diwali. The proposal was to levy a fee ranging from 0.25 per cent to 0.4 per cent on UPI transactions exceeding Rs 2,000.

NPCI announced the decision in a press release issued on Tuesday. The revised charges were originally scheduled to come into effect from October 15. October to December is the festive season in India, when digital payment transactions usually witness a rise. The decision to defer the charges has been taken in view of this.

There had been earlier reports that the implementation of MDR could be postponed until next year. The latest decision is reportedly in response to demands from traders' associations, fintech companies and payment service providers. There is also continued confusion over the MDR framework and its applicability to different types of UPI transactions. Payment institutions have therefore sought more time to implement the revised charges. Although the proposed system will not directly affect ordinary users, there are concerns that merchants may become reluctant to accept payments through UPI.