Current Context: On 13 October 2026, the National Payments Corporation of India (NPCI) deferred the implementation of Merchant Discount Rate (MDR) on select Unified Payments Interface (UPI) person-to-merchant transactions until immediately after Diwali. The proposed framework, originally scheduled for 15 October 2026, prescribes a 0.4% MDR on eligible payments above ₹2,000.
Key Points:
- Decision-Making Body: The postponement was decided by the UPI and Services Steering Committee, keeping the festive season in mind.
- Implementation Status: The framework has been deferred, with implementation planned immediately after Diwali on a separately notified date.
- Proposed Rate: 0.4%, equivalent to 40 basis points, on eligible P2M UPI payments exceeding ₹2,000.
- Maximum Charge: MDR is capped at ₹300 per transaction for payments of ₹75,000 and above.
- Who Pays: Merchants bear the MDR; consumers can continue making UPI payments free of charge.
- Small Payments: Transactions of ₹2,000 or less remain outside the proposed charge.
- Special Categories: Categories including railways, telecom, insurance and fuel have a proposed flat ₹5 MDR on eligible transactions above ₹2,000.
- Purpose: MDR revenue is intended to support payment infrastructure, cybersecurity, innovation and customer service.
Question:
Q1. What is the maximum MDR proposed for eligible UPI merchant payments of ₹75,000 and above?a) ₹100
b) ₹200
c) ₹300
d) ₹500
Answer: c) The proposed 0.4% MDR is capped at ₹300 per transaction for eligible payments of ₹75,000 and above. Its implementation has been deferred until after Diwali.
