Consumers who use Unified Payments Interface (UPI) for Diwali purchases do not have to pay extra transaction fees at the point of sale, according to reporting based on National Payments Corporation of India (NPCI) developments. Person-to-person (P2P) and person-to-merchant (P2M) UPI payments remain free for users, and merchants are not permitted to pass any merchant discount rate (MDR) to customers at the billing counter.
What changed and why it matters for shoppers
The rollout of a proposed MDR framework for select UPI merchant payments, which was scheduled to begin on 15 October 2026, has been postponed after appeals from trader groups. The implementation is now expected in the second week of November 2026. The NPCI has not published an exact implementation date.
Until NPCI issues the formal date and rules, the practical effect for consumers is clear: when paying with UPI at retail stores, supermarkets, or other businesses they should not be charged an additional fee for choosing UPI at checkout. This covers both transfers to friends and family and payments made by scanning a merchant’s QR code.
What the proposed MDR framework aims to do
The framework under discussion would introduce charges applied on certain high-value UPI payments to merchants. These proposed charges are expected to be billed to merchants rather than to consumers, according to the reporting. NPCI’s decision to delay follows representations from trader groups asking for more time or changes to the proposal.
- Consumers: UPI payments — P2P and P2M — remain free at present.
- Merchants: The MDR framework targets merchants and certain high-value transactions; details and final implementation date are pending NPCI's announcement.
- Timeline: Original start date was 15 October 2026; new expected window is the second week of November 2026.
During the festival season many shoppers increase digital payments; this postponement means consumers can continue using UPI without expecting extra checkout fees until NPCI clarifies the rule and the effective date.
| Event | Date |
|---|---|
| Originally scheduled MDR rollout | 15 October 2026 |
| Postponement after trader appeals | Reported late October 2026 |
| New expected implementation window | Second week of November 2026 (NPCI yet to announce exact date) |
Shoppers should be aware that the proposed charges, when applied, are intended for merchants and certain transaction categories; they do not automatically translate into consumer-facing fees. The National Payments Corporation of India remains the authority to issue the final framework and the formal effective date.
