India weighs MDR on high-value UPI payments to large merchants
A potential 0.3%-0.6% MDR could apply to UPI payments above Rs 2,000 at merchants with turnover over Rs 50 crore, while small payments and consumers remain exempt. No decision has been taken.
What happened
India is considering MDR on high-value UPI payments to large merchants, while small kirana transactions and consumers would remain exempt. The proposed fee
Key facts
- More than 95% of UPI transactions would face no MDR
- Only 4% of 2025-26 P2M UPI payments exceeded Rs 2,000
- Transactions above Rs 2,000 accounted for around two-thirds of UPI payment value
- Over 24,000 crore UPI transactions worth Rs 314 lakh crore in 2025-26
- Estimated annual industry costs: Rs 15,000 crore
- Government incentives paid: Rs 8,730 crore during 2021-22 to 2024-25
- Potential MDR: 0.3%-0.6% for merchants with turnover above Rs 50 crore
Why this matters
The proposal could increase the strategic value of partnerships with payment processors, banks and fraud-prevention providers that can offset MDR through better authorization, security and transaction economics.