The question of when India’s Unified Payments Interface (UPI) will finally be monetised has remained at the centre of the fintech industry’s conversations over the past month. 

The debate intensified after the National Payments Corporation of India (NPCI) deferred the introduction of merchant discount rate (MDR) charges on select UPI person-to-merchant (P2M) transactions.

Earlier reports suggested that the rollout could be pushed to January 2027. However, the framework now appears likely to be introduced after Diwali, with the industry awaiting a final announcement.

Under the proposed framework, eligible P2M UPI transactions above ₹2,000 would attract an MDR fee of 0.40%, capped at ₹300 per transaction. The proposal has drawn resistance from retail traders, who argue that the charges would add to their operating costs.

The All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors Federation (AICPDF) also called for a ‘No UPI Day’ protest, but eventually withdrew the proposal following a meeting with finance minister Nirmala Sitharaman. Separately, advocate Anjan Datta filed a public interest litigation (PIL) challenging the policy in the Supreme Court. The apex court, however, declined to stay the proposed MDR charges.

Meanwhile, UPI transaction volumes and values declined month-on-month (MoM) in September. The number of transactions fell nearly 1.8% to 24.07 Bn, while their cumulative value dropped 1.5% to ₹29.37 Lakh Cr.

However, the decline that followed August was met with an all-time high in monthly transaction volumes. Average daily UPI transactions increased to 802 Mn in September from 791 Mn in August, while the average daily transaction value rose to ₹97,913 Cr from ₹96,205 Cr.

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