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UPI MDR rollout from 15 October may be pushed to January 2027

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The government may delay the UPI MDR, a 0.4% merchant fee on Unified Payments Interface payments above ₹2,000 that was due to start on 15 October, by a few months, Reuters reported on Thursday, 8 October 2026, citing a regulatory official and an industry executive. The Financial Express reported that the rollout could move to 1 January 2027, though no final decision has been taken.

Key facts

  • Fee: 0.4% on person-to-merchant UPI payments above ₹2,000
  • Cap: ₹300 per transaction for payments of ₹75,000 or more
  • Free: person-to-person payments and merchant payments up to ₹2,000
  • Original start date: 15 October 2026
  • Possible new date: 1 January 2027 (reported, not final)

Why a delay is being considered

The fee would have started at the beginning of the October–December festive season, when consumer spending usually jumps. Sources told Reuters a postponement would avoid disruption to retail payments during the festivals and give payment companies more time to prepare their systems. The Financial Express said there would be no change to the framework already announced.

Separately, payment aggregators are negotiating with their sponsor banks for a larger share of the acquiring banks’ portion of the fee, the paper reported.

Payment stocks fall on UPI MDR report

Shares of digital payment firms fell after the reports. Paytm dropped 7.6% and One Mobikwik Systems slid 7.2%, The Times of India reported. Investors had seen the fee as an important monetisation opportunity for payment companies.

On Wednesday, RBI Governor Sanjay Malhotra said a “small fee” was unlikely to have a “major impact” on UPI volumes. On 28 September the Supreme Court refused to stay the Centre’s decision to impose the charge, while issuing notices on a plea challenging it.

Why it matters

UPI is used by more than 500 million people. Payments of up to ₹2,000, which make up over 95% of merchant UPI volume, stay free either way, so a delay mainly matters for larger shop and online purchases and for the payment firms counting on the new revenue.

Source: The Times of India (Reuters), The Financial Express, News18

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