📷 Image: Wikimedia Commons / NPCI
Business
NPCI to Introduce Merchant Discount Rate on Select UPI Transactions Post‑Diwali
✍️ The Goan
🗓 14 Oct 2026, 02:32 AM
👁 10
The National Payments Corporation of India announced it will apply a merchant discount rate to certain UPI merchant transactions starting after the Diwali holiday.
The National Payments Corporation of India (NPCI) has announced that it will impose a merchant discount rate (MDR) on a subset of UPI merchant transactions beginning after the Diwali holiday. The move is aimed at standardising fee structures for merchants who accept UPI payments.
Under the new scheme, merchants who process UPI payments through the selected channels will be required to pay a predetermined fee to the payment service provider. NPCI said the exact rate and the list of affected merchants will be communicated in a subsequent notice.
The decision comes as part of NPCI’s ongoing efforts to regulate the rapidly expanding UPI ecosystem and ensure sustainable revenue models for banks and payment intermediaries. The implementation date is set for the week following Diwali, allowing merchants to prepare for the change.
Industry observers note that the introduction of MDR could influence merchant adoption of UPI, especially for small and medium‑sized businesses that rely heavily on digital payments.
NPCI has urged all stakeholders to review the forthcoming guidelines and adjust their payment processing strategies accordingly.
Under the new scheme, merchants who process UPI payments through the selected channels will be required to pay a predetermined fee to the payment service provider. NPCI said the exact rate and the list of affected merchants will be communicated in a subsequent notice.
The decision comes as part of NPCI’s ongoing efforts to regulate the rapidly expanding UPI ecosystem and ensure sustainable revenue models for banks and payment intermediaries. The implementation date is set for the week following Diwali, allowing merchants to prepare for the change.
Industry observers note that the introduction of MDR could influence merchant adoption of UPI, especially for small and medium‑sized businesses that rely heavily on digital payments.
NPCI has urged all stakeholders to review the forthcoming guidelines and adjust their payment processing strategies accordingly.