Big UPI Update: NPCI to Introduce Merchant Discount Rate Charges on Certain Person-to-Merchant Transactions After Diwali:

The National Payments Corporation of India (NPCI) has announced that Merchant Discount Rate (MDR) charges on certain person-to-merchant (P2M) UPI transactions will be introduced after Diwali. The decision was taken by the UPI and Services Steering Committee on October 13, 2026, in view of the festive season.

According to NPCI, the new charges will apply to selected merchant transactions, and the implementation will begin after Diwali. The exact date and other details will be announced separately.

NPCI is the organisation responsible for managing and developing India’s retail digital payment systems. It was established by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) to improve the country’s payment infrastructure and make digital transactions more efficient.

NPCI operates several widely used payment services, including Unified Payments Interface (UPI), RuPay, the National Electronic Toll Collection (NETC) system, Aadhaar Enabled Payment System (AePS) and e-RUPI. These services support digital payments across the country and help improve access to financial services.

The organization also has subsidiaries, such as NPCI International Payments Limited (NIPL) that helps to extend Indian payment services overseas and NPCI Bharat BillPay Limited (NBBL) that manages Bharat Bill Payment System services.