The National Payments Corporation of India (NPCI) has officially announced that the implementation of the Merchant Discount Rate (MDR) for certain Person-to-Merchant (P2M) UPI transactions will be pushed back until after the Diwali festivities. This decision was made by the UPI and Services Steering Committee to ensure that the festive shopping period remains undisturbed by new processing fees. While the exact date for the rollout is yet to be finalized, the NPCI emphasized that these changes are designed to support the long-term sustainability and expansion of the digital payment ecosystem rather than acting as a tax on consumers.

It is important to note that the vast majority of digital payments will remain entirely free for users. Transactions under Rs 2,000, as well as person-to-person (P2P) transfers and payments to small merchants earning up to Rs 1 lakh per month, will continue to be exempt from these charges. For larger transactions, a fee structure has been established—such as a 0.4 percent rate for payments over Rs 2,000 or flat fees in essential sectors like fuel and utilities—but officials estimate that approximately 96 percent of all P2M transactions will remain unaffected by the new framework.