India to allow 0.4% MDR on UPI merchant payments above ₹2,000 from Oct. 15
The proposed charge, capped at ₹300 per transaction, would end zero-MDR treatment for higher-value UPI merchant payments. Mobile retailers’ body AIMRA has called a No UPI Day protest on Oct. 2, seeking continued zero MDR.
The development
India’s government will allow MDR on certain UPI merchant payments from October 15, charging 0.4% above Rs 2,000, capped at Rs 300. AIMRA plans a No UPI Day protest on October 2 and seeks zero MDR.
The numbers
- October 2
- October 15
- September 15
- Rs 2,000
- 0.4%
- Rs 300
- Rs 5
- 0.02%
- Rs 1 lakh
- Rs 40 crore a month
- Rs 2 or less
- 0.3%
- 18%
- over 14,000
- 0.30%
- Rs 100
- Rs 1,389 crore
- Rs 2,210 crore
- Rs 3,631 crore
- 11%
Why it matters to operators and investors
Prioritize discussions with acquiring banks, payment gateways, and UPI partners on MDR-sharing, volume-based rebates, and alternative payment products for high-value baskets before the proposed rule takes effect.
The counter-case
The impact may be overstated: a 0.4% fee applies only above ₹2,000, is capped at ₹300, and may be absorbed through pricing, bank/acquirer negotiations, or selective payment steering. For many retailers, incremental MDR could be materially smaller than existing card-acceptance costs and may not alter consumer payment behavior or margins significantly.