MUMBAI: The rollout of merchant discount rate (MDR) on select UPI transactions is expected to be postponed to Jan 2027 against the earlier date of Oct 15 with an announcement expected over the next couple of days.The move follows representations from trade bodies which were apprehensive that the introduction of the fees may impact festival season sales at a time when prices are rising. They have argued that introducing the fee during the festival season, when retail activity and digital payments typically rise, could increase costs for merchants and weigh on sales.A postponement will also give businesses more time to prepare for the implementation of MDR, which has been pushed by banks and RBI.The MDR framework was approved and notified by NPCI on Sept 15, with a 0.4% charge for eligible person-to-merchant (M) UPI transactions above Rs 2,000, capped at Rs 300 for transactions of Rs 75,000 and above. The framework was to take effect from Oct 15, giving banks, payment aggregators and other ecosystem participants a month to make operational changes.The framework was designed to create a revenue stream for the payments ecosystem after more than six years of effectively zero MDR on UPI. Govt had said the levy would apply only to specified merchant transactions, with payments up to Rs 2,000 and eligible small merchants continuing to remain free. About 96% of M transactions were expected to remain unaffected.