New Delhi, Oct 8: Trader organisations have urged the National Payments Corporation of India (NPCI) to delay the proposed new Merchant Discount Rate (MDR) framework for UPI transactions, saying the festive season may not be the right time to introduce additional costs for merchants.
The new framework is scheduled to come into effect from October 15. Trader bodies have requested that its implementation be postponed until after the festive season to give businesses more time to understand the new system and prepare for the change.
The demand comes at a time when shops, retailers and other businesses are seeing a rise in customer spending ahead of the major festive celebrations. Traders said even a small increase in payment-related costs could add to the pressure on businesses, particularly those operating on limited margins.
Under the proposed framework, a 0.4 per cent MDR would apply to eligible UPI merchant transactions above ₹2,000, with the charge capped at ₹300.
UPI has become an important payment option for businesses across India. From neighbourhood shops and restaurants to larger retailers, merchants increasingly depend on QR-based payments because they are quick, convenient and reduce the need to handle cash.
The scale of UPI has also grown rapidly. In September, the platform processed around 24.07 billion transactions worth ₹29.37 lakh crore, highlighting its importance to India’s growing digital economy.
Trader organisations have said they support the continued growth of digital payments but want any changes to the payment-cost structure to be introduced smoothly and with adequate preparation.
The issue is particularly important for small merchants, for whom payment costs can have a direct impact on margins when transaction volumes are high.
The discussion also reflects a broader challenge for India’s digital payment ecosystem. As UPI transactions continue to grow, banks and payment companies need resources to maintain payment infrastructure, strengthen cybersecurity and manage the rising volume of transactions. At the same time, merchants want digital payments to remain affordable.
With the festive shopping season gaining momentum, traders are seeking more time and greater clarity on the proposed MDR framework.
The final decision on whether the October 15 rollout will go ahead as planned or be deferred is expected to be closely watched by merchants, payment companies and other stakeholders.