India weighs MDR on high-value UPI payments, potentially ending zero-fee model for larger merchants
A proposal under government consideration could allow 0.3%-0.5% MDR on UPI payments above ₹2,000 for merchants with annual turnover above ₹1.5 crore, while retaining free transactions for smaller businesses. The move could reshape checkout costs for organised retail and digital-payment providers.
What happened
India has proposed amendments to enable MDR on certain UPI payments. Options include a 0.3%-0.5% fee on transactions above ₹2,000 for merchants with annual
Key facts
- Proposed MDR: 0.3%-0.5%
- Possible transaction threshold: above ₹2,000
- Possible merchant annual-turnover threshold: above ₹1.5 crore
- July UPI transactions: 23.6 billion
- July UPI transaction value: ₹29.9 lakh crore
- Transactions above ₹2,000: 4% of merchant-payment volume and about 67% of value
- Potential payments-industry revenue: ₹5,000 crore-₹10,000 crore
- Typical credit-card MDR: about 1.5%
- Typical debit-card MDR: up to 0.9%
Why this matters
Payments providers may gain strategic rationale to pursue merchant-acquiring, enterprise checkout and large-retailer partnerships that capture the newly monetizable high-value UPI flow.