Date for implementation of UPI MDR not announced even two days after Diwali

Even though two days have passed since the festival of Diwali, no new date has been announced by the National Payments Corporation of India (NPCI) regarding the implementation of the Merchant Discount Rate (MDR) on UPI transactions. According to a report by 'The Hindu', an NPCI spokesperson has clarified that no announcement has been made in this regard at present. When asked if the date for this is likely to be announced in the near future, they responded in the negative.

Previously, on 13 October, the NPCI had announced that its UPI and Service Steering Committee had decided to implement MDR on select person-to-merchant (P2M) UPI transactions, considering the festive season. This charge was to be implemented immediately after Diwali, and its date was to be announced separately. It is noteworthy that these new rates were originally scheduled to come into effect from 15 October, but were deferred.

There was strong opposition from traders and petrol pump dealers against the proposal to impose MDR on UPI. There was also concern among customers that traders would pass on this additional charge to consumers by increasing the prices of goods. Petrol pump dealers argued that there has been no revision in their commission for the last few years, and if the MDR charge is implemented, it will put further pressure on their profit margins.

According to the report by 'The Hindu', government sources stated that the decision to delay the implementation of MDR on UPI was taken by the Prime Minister's Office (PMO). This decision was taken following strong representation and appeals from traders. Praveen Khandelwal, founder and secretary general of the Confederation of All India Traders (CAIT) and Bharatiya Janata Party Lok Sabha MP, welcomed the delay. He stated that this decision would protect the interests of traders and maintain the momentum of digital payments during the festive season.