India weighs MDR return for large UPI, RuPay merchant payments above ₹2,000
A proposed rollback of zero-MDR rules could let payment providers charge large merchants on higher-value UPI and RuPay transactions. Capitalmind’s Deepak Shenoy has suggested a ₹5 or 0.2% ceiling, while small merchants and consumers would remain protected under the proposal.
What happened
India’s Finance Ministry has proposed removing zero-MDR requirements for UPI and RuPay, potentially charging large merchants on transactions above ₹2,000.
Key facts
- ₹5 proposed MDR cap
- 0.2% proposed maximum MDR rate
- ₹2,000 potential transaction threshold
- 4% of P2M UPI transactions exceeded ₹2,000 in 2025-26
- 24,161.69 crore UPI transactions in FY 2025-26
- ₹314.23 lakh crore UPI transaction value in FY 2025-26
- 0.15% low-value UPI incentive cap
- 88% of Indian digital transactions were UPI-based
Why this matters
Payments platforms, banks, and acquirers may gain renewed strategic value from merchant acquiring capabilities if MDR is reinstated for large-ticket transactions.