UPI merchant charge on payments above ₹2,000 will not start on 15 October; NPCI defers it until after Diwali
NPCI said on 13 October 2026 that the merchant discount rate on some UPI payments to shops above ₹2,000, due from 15 October, will start just after Diwali on a date to be announced, according to reports. Customers are not charged under the framework.
The 0.4% charge on some UPI payments to shops above ₹2,000, which was due to start on 15 October 2026, will not start on that date. The National Payments Corporation of India (NPCI), which runs UPI, said on 13 October that the charge will begin “immediately post Diwali” on a date it will announce separately, according to reports by ThePrint and The Tribune. The charge is paid by the merchant, not the customer, according to the reports.
The charge is called the merchant discount rate (MDR). It is the fee a shop or business pays to the banks and payment companies that process a payment it receives. No new date has been announced.
What NPCI said
According to the reports, the decision was taken by the UPI and Services Steering Committee, and NPCI said it had kept the festive season in mind. No new date was given. According to Kashmir Reader, merchant bodies, fintech companies and payment firms had asked for the start to be postponed.
What the deferred charge covers
The framework itself is unchanged by the deferral. As set out when it was announced in September and described in the reports:
| Item | Detail |
|---|---|
| Original circular | NPCI/UPI/OC-No.237/2026-27, dated 15 September 2026 |
| Applies to | UPI person-to-merchant (P2M) payments above ₹2,000 |
| Rate | 0.4%, capped at ₹300 per payment for payments of ₹75,000 and above |
| Some sectors | A flat ₹5 per payment above ₹2,000 for sectors including railways, telecom, insurance and fuel (The Tribune also lists utilities and education) |
| Not covered | Payments of ₹2,000 or less; person-to-person transfers; small merchants receiving up to ₹1 lakh a month through UPI QR codes |
| Paid by | The merchant. Customers are not charged |
| Original start date | 15 October 2026, now deferred to a date after Diwali to be notified |
A petition challenging the charge is pending in the Supreme Court, which on 28 September issued notice to the Centre, the RBI and other respondents and did not stay it, according to press reports. That hearing is covered in a separate article.
Basis of these figures
WealthStar could not open NPCI’s 13 October statement. The deferral, its date, the deciding committee and the quoted wording are from ThePrint, The Tribune and Kashmir Reader. The circular number and its date are from Paytm’s stock exchange filing of 15 September 2026, which refers to the circular. The original 15 October start is also in Kashmir Reader’s report. The rate, cap, sector charge and exemptions are as described in ThePrint’s and The Tribune’s reports.