UPI MDR rollout delayed? 0.4% fee on payments above ₹2,000 may start in January 2027

UPI MDR rollout may be delayed from October 15 to January 2027, giving merchants and payment firms more time to prepare. The proposed 0.4% fee applies to eligible UPI merchant payments above ₹2,000, while consumers remain exempt.

India is considering delaying the implementation of a proposed fee on large-value transactions through the Unified Payments Interface (UPI) by a few months, Reuters reported on Thursday, citing a regulatory official and an industry executive familiar with the discussions.

The proposed 0.4% fee on merchant transactions above ₹2,000 was scheduled to take effect from 15 October. A final decision has not yet been taken by the National Payments Corporation of India (NPCI), the sources told Reuters.

The delay, if approved, could push the implementation to January, giving payment companies more time to upgrade their systems and allowing merchants to navigate the upcoming festive shopping season without an immediate change to UPI payment costs.

The development comes after India moved last month to introduce a charge on large UPI merchant transactions, ending more than six years of zero-cost UPI payments. The proposed fee is an interchange or merchant-side charge and does not mean consumers will directly pay 0.4% every time they make a UPI payment.

UPI has become a major part of India's payments ecosystem, with more than 500 million users. NPCI data shows that UPI processed 24.51 billion transactions worth ₹29.82 lakh crore in August 2026.

Why is the UPI MDR rollout being considered for a delay?