Page 3 - Mdr

RAI warns UPI merchant fee could push small retailers back towards cash

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.

MDR may push small merchants, price-sensitive consumers towards cash: GTRI

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

'No question of rethinking 0.4% UPI MDR above ₹2,000': Govt official

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

No foreign influence behind MDR on UPI payments above ₹2,000: FinMin

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

UPI MDR above ₹2,000 may attract 18% GST; merchants can claim ITC

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 gets MDR: How 0.4% merchant fee compares with debit, credit cards

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 raise concern over 0.4% UPI fee on payments at Parliament panel meet

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

'Tax maximisation' or a 'much-needed step'? Verdict split on UPI MDR

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

UPI fee: Why government is putting a price on big merchant payments

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, ...

UPI MDR explained: How new charges compare with debit, credit cards

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

Run a small shop? How to check whether UPI MDR applies to you

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

0.4% MDR kicks in from October 15 for ₹2,000-plus UPI payments

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

Businesses divided on UPI MDR; retailers wary, quick commerce unfazed

Distributors flag concerns over the new UPI merchant charges, while quick-commerce firms expect limited impact as most transactions remain below the Rs 2,000 threshold

Only 17% merchants willing to bear 0.4% MDR on UPI payments: Survey

LocalCircles survey finds 41% of merchants unwilling to bear any MDR on UPI payments above Rs 2,000, while 9% do not accept UPI payments

Next phase for UPI

Modest charges will enable healthy growth

Banks' panel to decide on UPI merchant charges on transactions above ₹2,000

A panel comprising representatives of banks, service providers and various associations would soon take a call on charges to be levied on UPI payments above Rs 2,000 to merchants. The UPI & Services Steering Committee has 22 members, including Indian Banks' Association (IBA) and Payments Council of India (PCI). According to sources, the committee would soon take decision on Merchant Discount Rate (MDR) on UPI transaction above Rs 2,000 based on various factors including self-sustainability and market expansion. For example, merchant charge in Brazil's PIX ecosystem is around 0.33 per cent, while in China, such charge is 0.40 per cent. The government on Monday said that UPI transactions, including through RuPay debit cards, up to Rs 2,000 from person to merchant are free. All person-to-person UPI transactions will also continue to be free. As per a gazette notification dated September 14, no bank or system provider would impose, whether directly or indirectly, any charge on a ...

Two in five merchants unwilling to bear any MDR on UPI payments: Survey

LocalCircles survey finds 41% of merchants unwilling to bear any MDR on UPI payments above ₹2,000, while only 17% would accept a charge of 0.3% or more

Debit card rule may act as template to shield UPI users from MDR fee

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

MDR on UPI payments: Six rules govt must settle before charges can start

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

UPI vs cards: Why merchants pay MDR on cards but not on UPI payments

UPI payments are free for merchants, while card transactions carry MDR. Here's why the two digital payment systems have different costs and how a possible UPI charge could work