UPI charges may be postponed until next year:Payments could stay free during festive season; 0.4% MDR was set to take effect from Oct 15

The rule imposing charges on UPI may be postponed for now. The central government was scheduled to implement a 0.4% charge on UPI payments over ₹2,000 from October 15th. News agency PTI, citing sources, claimed that the government is considering implementing the new rule from January 1st next year. If this happens, shopkeepers and payment companies could be exempted during the festive season, meaning UPI transactions will be free. According to reports, the government is considering extending the implementation date of the 0.4% merchant fee to avoid additional burden on merchants during the festive season. An official decision from the government is expected within the next few days. Shares of companies such as Paytm and MobiKwik fall News of the postponement of the merchant charge on UPI had a direct impact on the shares of fintech companies listed on the stock market. 1. Paytm sees sharp fall During trading, Paytm’s share fell as much as 10% at one point, reaching a low of ₹1,561. However, it recovered slightly by the close of trading and ended at ₹1,640, down 5.42%. 2. MobiKwik, Pine Labs and other fintech shares also fall New rules on UPI MDR charges and their impact on merchants What is the Merchant Discount Rate? Merchant Discount Rate, or MDR, is the fee that a trader or shopkeeper pays to banks and payment service providers for using debit/credit cards or digital payment facilities such as point-of-sale machines or payment gateways. This fee is charged to cover the cost of operating digital infrastructure and transfer networks. The merchant has to pay this charge, not the customer. Retailers’ organisations’ argument against UPI charges