World · India Bureau
India's NPCI to decide on UPI transaction fee implementation
The National Payments Corporation of India faces a critical decision on whether to proceed with imposing a 0.4 percent merchant discount rate on select UPI transactions from October 15. Industry groups are pushing for a deferral until early 2027.
LSN India ·
A key deadline approaches for India's digital payments ecosystem as the National Payments Corporation of India (NPCI) prepares to decide whether to implement a merchant discount rate on high-value UPI transactions beginning October 15.
Under the proposed framework, a 0.4 percent MDR would apply to UPI transactions exceeding ₹2,000, affecting millions of users and merchants across the country. The move is intended to ensure sustainability of the digital payments infrastructure and compensate payment system operators.
However, merchant associations, fintech companies, and payment service providers have collectively requested a postponement until January 2027, citing concerns about the impact on businesses and payment adoption. The industry groups argue that additional time is needed to prepare operational adjustments and assess the implications for merchants and consumers.
With the October 15 deadline fast approaching, the NPCI's decision will significantly influence India's digital payments landscape. The regulator's choice could either proceed with the implementation as scheduled or accede to industry demands for a phased approach, potentially reshaping fee structures across the UPI ecosystem.