World · India Bureau
India delays UPI transaction fee implementation until after Diwali
The Indian government has postponed the introduction of merchant discount rate (MDR) charges on UPI transactions beyond 2,000 rupees, extending the fee-free period through the festive season. The decision comes ahead of the originally planned October 15 implementation date.
LSN India ·
The government has deferred its plan to levy MDR charges on digital payments made through the Unified Payments Interface (UPI) platform, citing the festive season as a key consideration in the policy reversal.
Transactions exceeding 2,000 rupees were originally scheduled to attract MDR fees beginning October 15. However, recognizing the significance of the Diwali shopping period, authorities have decided to extend the fee-free window until after the major Hindu festival.
The MDR, a charge typically borne by merchants accepting digital payments, has been a contentious issue among traders and payment service providers. The deferment reflects the government's effort to balance revenue considerations with consumer spending patterns and merchant concerns during the crucial festive purchasing season.
The exact timeline for implementing the MDR charges on higher-value UPI transactions will be determined following the Diwali period. The delay provides stakeholders with additional time to prepare for the fee structure's eventual rollout.