UPI MDR Delay: What It Means for Your Payments?

The government may delay a proposed merchant fee on large UPI transactions beyond October. Small business owners and everyday shoppers need to understand what MDR means and whether it will change how they pay or get paid.

Here's what happened: The government was reportedly planning to introduce a Merchant Discount Rate on select high-value UPI transactions from October 15, 2025.. Trader associations and industry bodies raised strong objections, citing concerns about cost burden on small and medium merchants.. According to sources, the rollout is now likely to be pushed back by a few months, though no final decision has been officially announced..

What you should do: If you run a small business, document your monthly UPI transaction volume now so you can calculate your MDR cost impact the moment a rate is officially announced.. Check whether your payment service provider (PhonePe, Paytm, Razorpay, etc.) has shared any MDR-readiness communication — read those emails carefully, don't dismiss them.. As a consumer, avoid accepting merchant requests to pay via cash 'to avoid charges' without understanding whether MDR has actually been enforced — confirm from official NPCI or RBI communications first..

MDR on credit card UPI transactions via RuPay already exists for large merchants — only BHIM-UPI bank-to-bank payments are currently MDR-free. Know the difference before assuming all UPI is free.