The National Payments Corporation of India (NPCI) has notified the UPI Vyapaar Saksham scheme to expand QR code and soundbox use among small merchants. The circular is dated 11 November 2026. The pool will be funded by a contribution from UPI merchant discount rate (MDR) collections, and the scheme is designed to run for three years from the date MDR on UPI is implemented.
The move follows NPCI’s earlier decision to levy a 0.4% MDR on UPI transactions above ₹2,000 from 1 April 2026, a change that has already been before the Supreme Court. UPI Vyapaar Saksham is framed as a way to recycle part of those collections into acceptance among smaller shops rather than leaving MDR as a charge alone.
Who can join the UPI Vyapaar Saksham scheme
Coverage is aimed at small merchants with annual turnover of up to ₹40 lakh. The geographic focus is Tier 3 to Tier 6 centres, the North-East, and Jammu & Kashmir and Ladakh. Merchants in Tier 1 and Tier 2 cities are eligible only if they are covered under the PM SVANidhi or PM Vishwakarma schemes. Eligible transactions are those of up to ₹2,000.
UPI member banks and payment service providers will contribute 5% of their MDR share to the scheme. The start of the three-year term is tied to the date on which MDR on UPI is implemented; that date had not been separately notified at the time the scheme was announced.
How the incentive pool is split
The scheme has three components:
- Component A, 30% of the pool, supports new merchant onboarding. It offers ₹300 towards a QR deployment and ₹750 towards a soundbox, subject to the merchant completing 25 eligible transactions in any two months of a quarter and a minimum monthly value of ₹5,000.
- Component B, 50% of the pool, pays 0.03% of eligible transaction value, with an extra 50% in the target geographies, linked to 5% quarter-on-quarter growth.
- Component C, 20% of the pool, pays 0.20% on incremental volumes in the target geographies.
The soundbox incentive sits alongside a wider push by acquirers to put audio confirmation devices on small-shop counters, a trend Elets has tracked in Pine Labs’ UPI soundbox deployments. It also follows earlier public funding for small-value UPI, including the ₹1,500 crore Cabinet-approved incentive scheme for low-value BHIM UPI transactions.
Key takeaways
- NPCI notified UPI Vyapaar Saksham on 11 November 2026, funded by 5% of members’ MDR share for three years from the date MDR on UPI is implemented.
- It targets small merchants with turnover of up to ₹40 lakh, mainly in Tier 3–6 centres, the North-East, Jammu & Kashmir and Ladakh, for transactions of up to ₹2,000.
- The pool is split 30/50/20 across new QR and soundbox onboarding, growth-linked incentives, and incremental volumes in target geographies.
FAQs
Has NPCI published the circular on its website? The circular is dated 11 November 2026. At the time of writing it was not listed on NPCI’s public UPI circulars page. Official updates are posted at NPCI’s UPI circulars section.
Featured image: A neighbourhood sweet shop in North 24 Parganas, West Bengal. Photo: Yooktashree Barai, Wikimedia Commons (CC BY-SA 4.0).
