MDR

Assocham said the new UPI MDR framework for high-value merchant payments will support investment in technology and infrastructure, while helping expand UPI acceptance across the country

UPI carries 0.02% MDR, capped at ₹300, while netbanking costs ₹8-12, negotiated between banks and payment service providers

Brokerages expect banks to receive the largest share of the levy, while Paytm, Pine Labs and other fintechs could gain from higher transaction-linked revenue annually

Finance Ministry rejects claims of US pressure behind UPI MDR, as Opposition parties and trader groups demand reconsideration of the new merchant fee

The framework excludes UPI-linked CC payments, and is expected to affect only 4 per cent of merchant transaction volume.

UPI apps say their Rs 1 share from a Rs 5 MDR on larger bill payments will not cover Bharat Bill Payment System commissions, while smaller transactions earn nothing at all

Experts say GST will raise the upfront cost of accepting eligible UPI payments, but registered businesses can offset the tax through input tax credit, subject to applicable rules.

Petitioner questions the amended payment law, lack of gazette publication and differing treatment of UPI and RuPay debit-card transactions under the new framework

Industry body says the charge could drive small merchants back to cash, weaken formalisation and undermine digital payment adoption during the festive season across India.

The Merchant Discount Rate (MDR) charges on UPI transactions above Rs 2,000 could push small merchants and price-sensitive consumers back towards cash, economic think tank GTRI said on Wednesday. Effective October 15, UPI payments to merchants (P2M) above Rs 2,000 will attract a 0.4 per cent MDR with an overall cap of Rs 300. Besides, a flat concessional MDR of Rs 5 would be applicable on specific merchant categories such as railways, telecom services, insurance, and fuel for transaction above Rs 2,000. "MDR could push small merchants and price-sensitive consumers back towards cash," GTRI Founder Ajay Srivastava said in a social media post. He said that UPI fees are not about revenue as keeping UPI free costs the government Rs 2,000-2,500 crore annually. "This is tiny compared with subsidies of Rs 2.03 lakh crore for food, Rs 1.68 lakh crore for fertilisers, Rs 22,800 crore for agricultural credit and Rs 12,500 crore for petroleum and LPG," he said adding the NPCI (National Payment

The government has said the MDR will apply within the merchant payment ecosystem and will not be charged to consumers

The finance ministry on Wednesday clarified that there was no foreign influence behind the decision to impose 0.4 per cent Merchant Discount Rate on UPI transactions above Rs 2,000. The clarification follows accusations by some Opposition parties, including the Congress, that the government succumbed to US pressure in taking the decision to impose the Merchant Discount Rate (MDR). "Some claims suggest the change is due to foreign influence. This is false. India's UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem," the finance ministry said in a post on X. Since its launch in 2016, UPI has grown into the world's largest real-time interoperable payment system - entirely on India's own terms, it said. UPI processed 24.5 billion transactions in August 2026 alone. To keep this system self-sustainable, secure and innovative, a small fee on high-value merchant transactions helps fund better

Merchants would have to pay 18 per cent GST on the Merchant Discount Rate (MDR) charges for UPI payments above Rs 2,000, but can claim input tax credit (ITC), thereby easing the overall tax burden, tax experts said on Wednesday. Effective October 15, UPI payments to merchants (P2M) above Rs 2,000 will attract a 0.4 per cent merchant discount rate with an overall cap of Rs 300. Besides, a flat concessional MDR rate of Rs 5 would be applicable on specific merchant categories such as railways, telecom services, insurance, and fuel for transaction above Rs 2,000. The share of P2M UPI transactions above Rs 2,000 has steadily increased from 15.1 per cent in FY23 to 20.1 per cent in the June quarter of FY27, reflecting a sustained shift towards higher-value merchant payments on UPI. Under the proposed framework, the MDR would be borne by the merchants as a charge for payment settlement services. Since the charge is to be borne by merchants for processing and settling digital payment ...

The new UPI MDR ends its zero-cost model for select high-value merchant payments; here is how the 0.4 per cent charge compares with what merchants pay to accept debit and credit cards

MPs, mostly belonging to the Opposition, on Wednesday expressed concern over the government's decision to levy a fee on UPI payments above Rs 2000 to merchants, claiming that the entire population of the country would be affected due to the "anti-people" move. Chairman of the Parliamentary Standing Committee on Finance Bhartruhari Mahtab said that some MPs raised the issue at the meeting and said that it may be taken up at the next meeting of the panel. RSP MP NK Premchandran, who is a member of the committee, said that the entire population of the country would be affected by the government's decision to levy a fee on payments of above Rs 2000 to merchants. "It is a completely anti-people decision," Premchandran said. Ending nearly six years of fully free UPI payments, the government on Tuesday introduced a 0.4 per cent fee on transfers worth more than Rs 2,000 made to merchants through UPI from October 15, while explicitly ring-fencing everyday person-to-person transactions as we

UPI MDR has sparked a debate among major fintech players, with some calling it necessary for sustainability while others question the cost burden on merchants and businesses

The government is putting a price for merchants using its flagship digital payment network to accept large transactions - a shift that follows years of warnings from the payment industry that the annual subsidy budgeted for the Unified Payments Interface (UPI) never came close to covering the real cost of running it. From October 15, a 0.4 per cent Merchant Discount Rate (MDR) will apply to person-to-merchant UPI payments above Rs 2,000. The charge will be paid by merchants, not consumers, and will be capped at Rs 300 for transactions of Rs 75,000 or more. Payments between individuals, as well as the vast majority of everyday merchant payments, will remain free. The National Payments Corporation of India, which operates the UPI network, said the revenue will support investment in infrastructure resilience, cybersecurity, fraud prevention, innovation and customer service. "The MDR is distributed only amongst the UPI ecosystem, to further invest into infrastructure resilience, ...

Credit cards can cost merchants 1.5-2.5%, while debit cards can cost up to 0.9%; new UPI MDR is capped at Rs 300

UPI payments above ₹2,000 will attract a merchant fee for eligible businesses from October 15. Here's how small shopkeepers can check if the new MDR rules apply to them

Sources stress MDR is not a tax on UPI, since the fee is distributed among participants in the payments chain rather than accruing to the government