India to levy 0.4% UPI MDR on merchant payments above Rs 2,000 from Oct 15
The new fee on UPI person-to-merchant payments above Rs 2,000 could open a merchant-payment revenue stream for fintechs. Paytm shares rose 7.24%, while Pine Labs and MobiKwik gave up early gains. Customers will remain exempt from the charge.
What happened
India will levy a 0.4% UPI merchant discount rate on P2M payments above Rs 2,000 from October 15, while customers remain exempt. Paytm said the change creates
Key facts
- 0.4% MDR on UPI person-to-merchant transfers above Rs 2,000
- MDR capped at Rs 300 for payments of Rs 75,000 and above
- Paytm shares rose 7.24% to Rs 1,856.50
- MobiKwik shares initially rose 5.96% before trading 2% lower
- Pine Labs shares initially rose 2.68% before trading 7% lower
What changed
India will levy a 0.4% UPI merchant discount rate on P2M payments above Rs 2,000 from October 15, while customers remain exempt. Paytm said the change creates merchant-payment revenue; its shares rose over 7%.
Why this matters
Retailers should model the new 0.4% UPI MDR on merchant payments above Rs 2,000 into payment-cost planning while keeping customer checkout messaging clear because consumers remain exempt.
What to watch
- Formal government, NPCI and RBI implementation circulars clarifying merchant categories, surcharge rules, exemptions and enforcement.
- Whether the Rs 2,000 threshold applies per transaction, invoice, merchant-day aggregate or payment instruction, which will determine transaction-splitting incentives.
- Merchant association responses from kirana, restaurant, fuel, pharmacy, electronics and e-commerce sectors.
- UPI P2M transaction value growth versus transaction-count growth after Oct. 15, especially the share of payments clustered just below Rs 2,000.
- Changes in card, wallet, net-banking and cash usage for high-ticket retail purchases.
Also reported by
- YourStory — Same time