Union Finance Minister Nirmala Sitharaman on Thursday announced that any deferment in the proposed Merchant Discount Rate (MDR) on UPI transactions will be decided by stakeholders in the payments ecosystem,
leaving it to them to determine when the charges will actually be levied.
Speaking after the 57th GST Council meeting, Sitharaman said any deferment of the proposed MDR would be decided by the stakeholders involved in the payments system.
“Deferment of MDR will be handled by the stakeholders. It’s on them to decide from when MDR will be levied on UPI transactions,” Sitharaman said.
Her remarks come amid reports that the planned introduction of UPI MDR from October 15 could be postponed to January 2027. Merchant groups, fintech companies and payment firms have reportedly sought additional time from the National Payments Corporation of India (NPCI).
What Is The Proposed UPI MDR?
The UPI Steering Committee has approved an MDR of 0.4% on specified merchant transactions above Rs 2,000. The charges are currently scheduled to come into effect from October 15.
The proposed MDR will not cover person to person UPI payments. Merchant transactions of up to Rs 2,000 will also remain outside the proposed levy.
The possible deferment is being discussed as businesses and payment companies seek more time before the new charges are introduced. For now, the October 15 date remains the scheduled implementation date, while the final decision on any deferment will be taken by stakeholders.
