In Brief
- 0.4% MDR charge to apply on UPI merchant transactions above ₹2,000.
- UPI transactions up to ₹2,000 will attract zero MDR as per Centre's notification.
- Consumers and person-to-person transactions remain free of MDR charges.
- Move impacts merchants but not general consumers making payments via UPI.
The government has implemented a Merchant Discount Rate (MDR) of 0.4% on Unified Payments Interface (UPI) transactions exceeding ₹2,000 for merchants. This update follows the Centre's earlier notification on September 14 stating that UPI payments up to ₹2,000 will carry zero MDR charges on merchant transactions.
UPI transactions up to ₹2,000 remain free for both merchants and consumers, ensuring that small-value payments and peer-to-peer transfers continue without additional costs. The MDR charge applies only when the transaction amount surpasses the ₹2,000 threshold during merchant payments.
This move is aimed at balancing the cost burden between payment service providers and merchants, while maintaining UPI's accessibility and convenience for everyday users. Person-to-person transactions through UPI will continue to be exempt from these charges, preserving free access for individual users.
The new MDR policy seeks to regulate merchant transaction fees without impacting the widespread usage of UPI among consumers for both small and moderate payments.
