Dinesh Khara, former chairman of the State Bank of India, interpreted the National Payments Corporation of India's decision to roll out a merchant discount rate on certain Unified Payments Interface transactions in the period following Diwali as a signal of firm intent to carry the policy through.

The extended timeline, Khara noted, would give banks, merchants, fintech firms, and other involved parties the opportunity to work through operational concerns and prepare for the new framework before it comes into force. The deferment, in his view, clarifies questions about when the rollout would begin without indicating any broader reconsideration of the policy itself, with full implementation still expected to follow.

Khara urged all relevant parties to use the intervening period to familiarise themselves with the new framework and ensure they are ready before it takes effect. A post-Diwali rollout has been set by NPCI for the merchant discount rate on certain person-to-merchant UPI payments exceeding ₹2,000, with a precise launch date to be announced through a separate notification.

Naming a post-Diwali window, Khara noted, points toward a delayed rollout rather than one that has been abandoned altogether. Retailer groups' concerns about managing the uptick in transaction volumes during the festive period appeared to have been factored into the decision, he added.

Extending the timeline, he noted, could give authorities room to work through stakeholder objections without dismantling the overarching structure. Khara put forward the position that MDR is needed to allow participants across the digital payments ecosystem to keep funding infrastructure and cybersecurity work, with his statement pointing to the pressures various stakeholders face in directing resources toward technology and managing cyber-related challenges.

The proposed MDR rate, he noted, would stay modest in practice, given that UPI payments below a certain value threshold would fall outside its scope. When asked about the short-term revenue impact tied to the postponement, Khara downplayed the financial exposure, noting that lenders had already been absorbing the delay and that an extension of another week or two would not materially alter the situation.

Organisations that invest in payment infrastructure, he argued, deserve to recoup those costs. Abizer Diwanji, who heads Neostrat Advisors, expressed support for the underlying rationale behind the fee on a long-term basis, adding that any postponement ought not to be read as the policy being walked back, and characterised the charge not as a tax but as a pool of resources intended to strengthen the resilience of technology infrastructure.

The timeline for rollout, in Diwanji's view, remains open to revision, whereas the proposed fee structure does not.