MDR Charges

Merchants receiving up to ₹1 lakh a month in eligible UPI QR payments remain outside the new MDR regime, but repeated breaches can trigger reclassification to P2M

Fintech stocks react to MDR news: Paytm, Pine Labs and One MobiKwik Systems decline up to 13% during the week, recover on Friday. Here's why the tech analyst remains bullish on Paytm and Pine Labs.

UPI payments will remain free for consumers, but from October 15, eligible merchants will face a 0.4% MDR on certain UPI transactions above ₹2,000.

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 ...

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

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

Paytm shares rallied 7 per cent to a fresh 52-week high of ₹1,856.50 on the BSE. Mobikwik stock rose by 6 per cent to ₹214. However, Pine Labs slumped 6 per cent to ₹182 per share.

The Bill opens the door to selective UPI MDR, but leaves the operating details undecided. Here are six questions the final framework will need to answer before any charge takes effect

It is worth seeing the argument from a perspective that does not limit itself to asking how UPI infrastructure costs ought to be funded

The day's opinion highlights flaws in closing auctions, the funding challenge in digital payments, humane KYC, cognitive warfare and everyday gender discrimination

Today's opinions examine the RBI's inflation dilemma, rising life insurance surrenders, India's employment crisis, possible UPI charges and the shift from food to nutrition security

"The Government remains fully committed to promoting digital payments via UPI," the finance ministry said

According to analysts, SBI Card and Paytm stand to gain the most if RBI agrees to levy 2% merchant discount rate (MDR) on RuPay-based credit cards linked to UPI

Business Standard brings you top events that are lined up for Wednesday

Department of Revenue (DoR) will soon notify RuPay and UPI as the prescribed mode of payment for digital transactions without any Merchant Discount Rate

The transactions need to made through debit cards, BHIM-UPI and Aadhaar Pay

Kanungo also said the new rate structure is beneficial to all concerned as it is simple and a single rate

Last week, RBI had drastically cut MDR charges on debit card payments from April 1