FinMin clarifies RuPay credit-on-UPI MDR is a merchant cost, not a customer charge
India’s Department of Financial Services said customers cannot be charged MDR on RuPay credit-card payments made via UPI. Eligible merchants with annual turnover below Rs 20 lakh face no MDR on transactions up to Rs 2,000, while fees apply to select higher-value large-merchant payments.
What happened
India's DFS clarified that MDR on RuPay credit-card payments via UPI is payable by merchants, not customers. Small merchants get no MDR on eligible transactions
Key facts
- No MDR on RuPay credit card-on-UPI transactions up to Rs 2,000 for merchants with annual turnover below Rs 20 lakh
- Rs 5 levy on select UPI transactions above Rs 2,000
- 0.4% levy for large merchant payments above Rs 2,000
- Rs 300 fee cap
- Rs 20 lakh annual merchant turnover threshold
Why this matters
Prioritize issuer, UPI and acquirer partnerships that can offset large-merchant MDR through volume incentives, loyalty funding or bundled payment services.