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The National Payments Corporation of India (NPCI) has postponed implementation of the proposed merchant discount rate (MDR) on selected person-to-merchant (P2M) UPI payments until immediately after Diwali. NPCI has not announced the exact implementation date. Reports that Jairam Ramesh questioned the deferral cannot yet be confirmed: no verified statement or reliable quotation from him was available as of 13 October 2026.
What NPCI announced
NPCI’s statement, reported on 13 October 2026, says the UPI and Services Steering Committee decided to implement MDR on selected P2M transactions “immediately post Diwali” on a date to be notified separately. The earlier reported start date was 15 October 2026. The decision is a postponement, not an announced cancellation, and the reported framework had not otherwise changed.
NPCI managing director and chief executive Dilip Asbe told Mint: “We have deferred the rollout until after Diwali. The final date will be announced soon.” “After Diwali” should not be converted into a specific calendar date until NPCI issues its notification.
Why the timing matters
NPCI cited the festive season as the reason for delaying the rollout. Contemporary reporting also described opposition from trade bodies and concerns that additional merchant costs could affect festive-season spending. Those concerns are reported context, not a separate reason officially given by NPCI.
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The delay comes as UPI handles very large volumes. The Ministry of Finance, in a statement released through the Press Information Bureau, reported 2,366 crore UPI transactions worth ₹29.9 lakh crore in July 2026. The Economic Times attributed an estimate of about ₹21,000 crore in annual UPI ecosystem operating costs to Asbe. That estimate is an executive figure, not an audited government total.
What the proposed MDR would cover
MDR is a fee charged on the merchant side for accepting a payment; it is not automatically a fee charged to the person sending money. The Ministry of Finance said on 8 August 2026 that consumers would not face UPI transaction charges and that all person-to-person (P2P) transfers would remain free. It described any future MDR as a threshold-based charge on certain merchant transactions rather than a blanket UPI fee.
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| Reported element | Proposed treatment | Qualification |
|---|---|---|
| Eligible merchant UPI payment above ₹2,000 | 0.40% MDR, capped at ₹300 | Reported by Business Standard; final notification is pending |
| Some categories, including bill payments, fuel and education | ₹5 flat fee | Reported category treatment; the final scope must be confirmed by NPCI |
| P2P transfers | Free | Stated by the Ministry of Finance |
| Merchant payments of ₹2,000 or less | Reported exemption | Reported by Mint |
| Small merchants with monthly UPI transactions up to ₹1 lakh | Reported exemption | Reported by Mint |
The Economic Times reported an expectation that more than 95% of merchant UPI transactions by volume would remain free under the proposed structure. That is a newspaper-reported expectation, not a confirmed final statistic.
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Will customers be charged?
Under the policy description issued by the Ministry of Finance, no. The proposed MDR is a merchant-acceptance cost, while P2P transfers remain free. Whether a merchant changes prices or passes on costs commercially is a separate question and is not the same as NPCI imposing a consumer transaction fee.
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What is known about Jairam Ramesh’s question?
The headline’s Ramesh angle is not established by the available reporting. Searches did not verify a primary post, parliamentary intervention or reliable article quoting Jairam Ramesh asking about, opposing or criticizing the deferral. It would therefore be inaccurate to attribute a specific question or motive to him. Any such claim should wait for a direct statement or dependable attributed report.
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What happens next
- NPCI must publish the separate notification specifying the post-Diwali date.
- That notification should clarify the final eligible merchant categories, exemptions, cap operation and collection mechanics.
- Merchants and payment providers should check the notification rather than relying on the previously reported 15 October date or speculation about a January 2027 start.
- Consumers should distinguish any merchant pricing decision from a UPI transaction charge; the government’s stated position keeps consumer and P2P transfers free.
Key distinctions to keep straight
- P2P versus P2M: sending money to another person is different from paying a merchant.
- MDR versus customer fee: MDR is a merchant-side acceptance charge in the proposed framework.
- Threshold versus blanket charge: the reported 0.40% rate applies only to eligible payments above ₹2,000, subject to exemptions and the ₹300 cap.
- Deferral versus cancellation: implementation moved beyond Diwali; the proposal itself was not reported as withdrawn.
- Reported framework versus final rules: detailed exemptions came from media reports and require confirmation in NPCI’s eventual notification.
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