Story perspectives

NPCI Postpones 0.4% UPI Merchant Discount After Diwali

By Drooid · Oct 13, 2026, 4:42 PM UTC · How we work

Summary

Story summary

NPCI announced postponement of the 0.4% merchant discount rate on select person-to-merchant UPI transactions until after Diwali.
The 0.4% MDR applies only to transactions above Rs 2,000, capped at Rs 300 for payments of Rs 75,000 or more.
About 96% of person-to-merchant UPI transactions will remain zero-MDR.
The Ministry said the fee will be shared with banks and payment-app providers, not a tax, and borne by merchants.

History

Historical Context

RBI’s 2009 vision for a domestic card system led NPCI to launch RuPay in 2012; the network reached 50% market share by November 2018 and eliminated all MDR on 1 January 2020. State Bank of India and HDFC Bank, two of the ten banks backing RuPay, joined the fee-free rollout, expanding digital commerce. The 2024 postponement of a 0.4% MDR on select UPI payments continues this trend.

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Story summary

NPCI announced postponement of the 0.4% merchant discount rate on select person-to-merchant UPI transactions until after Diwali.
The 0.4% MDR applies only to transactions above Rs 2,000, capped at Rs 300 for payments of Rs 75,000 or more.
About 96% of person-to-merchant UPI transactions will remain zero-MDR.
The Ministry said the fee will be shared with banks and payment-app providers, not a tax, and borne by merchants.

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