Merchant Discount Rate MDR

A 2017 RBI rule barring merchants from passing debit card MDR to customers could guide safeguards against similar charges on UPI payments

UPI remains free for consumers and merchants, but the cost of running India's digital payment infrastructure has revived the debate over MDR, subsidies and platform fees

The government has not notified ₹2,000 as an MDR threshold, but the existing incentive framework and transaction data explain why the number dominates the debate

"No MDR framework has yet been finalised," Sitharaman said. She added that consumers would continue to make instant digital payments through UPI without paying a transaction charge

Potential UPI MDR could boost revenues for dominant players like PhonePe and Paytm, while giving smaller apps a viable path to profitability and customer acquisition

The Taxation and Other Laws (Amendment) Bill, 2026, could pave the way for an MDR on UPI. Here's how MDR works, the current structure and what may change

RBI Governor Sanjay Malhotra says digital payment infrastructure has costs as the Union government weighs bringing back MDR on high-value UPI merchant transactions

Amendment to PSS Act is the first of several steps; rate, threshold and revenue-sharing formula still undecided

Proposed amendment shifts the power to notify fee-protected payment modes to the Centre, a move industry sources see as an early step towards a possible UPI MDR

MDR refers to a fee that merchants pay banks or companies (fintech) processing payments for executing a transaction

Industry's concerns surfaced after the government approved ₹1,500 crore in a scheme for the promotion of low-value BHIM-UPI transactions when made from peers to merchants

Authorities are now favouring 'push' transactions, where customers initiate payments by scanning QR codes or using other secure methods

"In the long run, the payments ecosystem has to be viable in a country of our scale," said Bulusu

Education and awareness among the masses will absorb more users in the fold of digital payments

'RuPay credit card UPI to see good traction if small merchant transaction stays within 10%'

Payment aggregators have received nothing, says Vishwas Patel as RBI discussion paper starts debate

UPI charges may partially offset loss on credit card MDR

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

NPCI set to seek RBI nod for scheme; free swipes at smaller outlets

Smaller merchants can be subsidised to make it work