Traders’ bodies have urged the National Payments Corporation of India (NPCI) to defer the rollout of the new UPI MDR framework scheduled for October 15, citing concerns over its impact on merchants during the crucial festive shopping season.
Traders seek delay in new UPI MDR framework
The report from NDTV Profit — citing sources — said trade associations proposed delaying the new charges until after the festive season or into early next year, citing concerns about the impact on merchants during a peak sales period. NPCI, which designed the revised MDR framework in consultation with stakeholders, has not yet taken a decision.
What the new UPI MDR framework means for merchants
Under the new rules, a flat levy of Rs 5 will apply to select merchant categories for UPI payments above Rs 2,000, while large merchant payments above Rs 2,000 will attract a fee of 0.4 per cent, capped at Rs 300, NPCI had said.
Capital‑market payments, such as mutual funds and securities transactions, will face a lower MDR of 0.02 per cent, also subject to a Rs 300 cap per transaction.
Most UPI merchant transactions to remain outside MDR
NPCI estimates the changes will affect only about 4 per cent of merchant transactions, leaving over 95 per cent of person‑to‑merchant UPI payments outside the MDR framework. Small merchants using peer‑to‑peer merchant models will continue to enjoy zero MDR.
No monthly quota or cap is imposed on free UPI usage for individual users, and they can continue to make UPI payments without an MDR charge on transactions within the applicable free framework.
New fund proposed to support small merchants
The revised structure also creates a dedicated fund to promote UPI acceptance among small merchants, with 5 per cent of total MDR collections earmarked for the initiative. MDR revenue will be shared among players and is intended to support UPI expansion, cybersecurity and innovation. Banks have been advised to ensure merchants do not pass MDR charges on to customers.
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