NPCI FAQ signals 0.4% MDR on merchant UPI payments above ₹2,000 from 15 October
Merchant UPI payments above ₹2,000 would attract 0.4% MDR, capped at ₹300 per transaction, under NPCI’s FAQ guidance. P2P transfers and smaller merchant payments remain free, keeping UPI acceptance materially cheaper than credit-card MDR and below debit-card caps for larger tickets.
What happened
National Payments Corporation of India (NPCI) · NPCI says a 0.4% MDR will apply to merchant UPI payments above ₹2,000 from 15 October, capped at ₹300. P2P and
Key facts
- 0.4% MDR on P2M UPI transactions above ₹2,000
- ₹300 maximum MDR per transaction for payments of ₹75,000 and above
- 70% of total UPI transaction value remains outside MDR framework
- Credit card MDR: 1.5% to 2.5%
- Debit card MDR cap: 0.90%
What changed
NPCI says a 0.4% MDR will apply to merchant UPI payments above ₹2,000 from 15 October, capped at ₹300. P2P and sub-₹2,000 payments remain free, lowering acceptance costs versus debit and credit cards.
Why this matters
Reprice checkout economics for UPI orders above ₹2,000, as the proposed 0.4% MDR—capped at ₹300—will matter most for large-ticket categories and may warrant routing or incentive adjustments.
What to watch
- Formal NPCI circular or revised FAQ confirming whether the fee is mandatory, optional, PSP-specific or category-specific.
- RBI, Ministry of Finance or NPCI statements on merchant discount rate policy, subsidy support and zero-MDR treatment.
- Acquirer and major PSP merchant communications showing actual pass-through pricing and onboarding requirements.
- Merchant association, large marketplace, travel, jewellery and electronics retailer responses, especially any announced checkout steering or payment discounts.
- UPI payment mix and authorization/conversion trends for transactions just above and just below ₹2,000.