Centre proposes 0.4% MDR on UPI merchant payments above ₹2,000
From October 15, the proposed framework would charge merchants 0.4% on UPI payments above ₹2,000, while exempting P2P transfers and merchants receiving up to ₹1 lakh a month via UPI. The move could raise payment-acceptance costs for larger retailers and prompt selective consumer fee pass-through.
What happened
Unified Payments Interface (UPI) · The Centre plans a 0.4% MDR on merchant UPI payments above ₹2,000 from October 15, while exempting small merchants and P2P
Key facts
- 0.4% MDR on merchant UPI transactions above ₹2,000
- MDR exemption for merchants receiving up to ₹1 lakh monthly through UPI
- 33% of P2M transaction value and 96% of P2M transaction volume are below ₹2,000
- 5% of MDR collections proposed for a small-merchant UPI adoption fund
- ₹5 flat fee for specified payments
- 0.02% MDR for securities and mutual-fund transactions
- ₹300 MDR cap for P2M transactions above ₹75,000
Why this matters
Prioritize payments partnerships, routing capabilities, and merchant-acquiring assets that can help large retailers optimize UPI acceptance costs and manage selective surcharge compliance.