India may reinstate 0.3% UPI merchant fee on payments above Rs 2,000
A proposed gazette notification could restore MDR on UPI transactions above Rs 2,000 within weeks, with consumers exempt. The move would raise acceptance costs for larger retailers; NPCI’s steering committee is expected to determine the final scope and structure.
What happened
Unified Payments Interface (UPI) · India may restore a 0.3% merchant fee on UPI transactions above Rs 2,000, while consumers remain exempt. NPCI’s steering
Key facts
- 0.3% proposed MDR
- Rs 2,000 transaction threshold
- within two weeks
- 0.15% existing government incentive
- 1-3% credit-card MDR
- up to 0.9% debit-card MDR
- 241.62 billion FY26 UPI transactions
- Rs 314.23 lakh crore FY26 transaction value
- Rs 2,000 crore 2026-27 allocation
- Rs 20,700 crore estimated operating cost
- Rs 1.38 estimated cost per transaction
Why this matters
The proposed fee could improve the strategic value of payments infrastructure, acquiring partnerships, and retailers with lower reliance on high-ticket UPI transactions, though NPCI’s final design remains the critical unknown.