UPI MDR Delayed: What It Costs You After Diwali?

NPCI has postponed introducing a small transaction fee on certain UPI payments to after Diwali. While you won't pay directly, merchants may quietly pass this cost to you through higher prices or surcharges.

Here's what happened: NPCI has officially deferred the rollout of UPI MDR (Merchant Discount Rate) charges to a date after Diwali, citing the festive spending season as the key reason for the delay.. MDR, if introduced, would be a small percentage fee on select UPI transactions — likely targeting higher-value payments or merchants above a certain transaction volume threshold.. The exact post-Diwali implementation date has not been announced yet; NPCI has said a new timeline will be communicated separately to payment ecosystem players..

What you should do: Check if your regular merchants — grocery stores, local shops, service providers — are categorised as large merchants, as they are most likely to fall under the MDR net first.. Watch for any bill amendments or revised pricing from businesses you frequently pay via UPI; MDR costs often get absorbed silently into product or service prices.. Compare payment options: if MDR kicks in on UPI for large transactions, paying via BHIM UPI-linked savings instruments or negotiating cash discounts for big purchases may save you money..

RBI rules currently prohibit merchants from adding a visible UPI surcharge to your bill — so if a shopkeeper tries to charge you extra for paying by UPI after MDR rolls out, you can formally report it to RBI's Sachet portal.