NPCI framework to add 0.4% MDR on select UPI merchant payments above ₹2,000
From 15 October 2026, selected P2M UPI transactions above ₹2,000 are set to attract 0.4% MDR, capped at ₹300 per payment. The merchant-borne charge could alter payment-acceptance costs for retailers, especially in higher-ticket categories.
What happened
NPCI’s new framework will levy 0.4% MDR, capped at ₹300, on selected merchant UPI payments above ₹2,000 from 15 October. The cost will be borne by merchants,
Key facts
- 0.4% MDR on selected P2M UPI transactions above ₹2,000
- ₹300 maximum MDR per UPI transaction
- ₹20 MDR on an eligible ₹5,000 transaction
- ₹200 MDR on a ₹50,000 transaction
- Debit-card MDR: 0.40% physical POS/online and 0.30% QR for merchants with annual turnover up to ₹20 lakh
- Debit-card MDR: up to 0.90% and 0.80% for other merchants
Why this matters
The change could increase the strategic value of acquiring partnerships, merchant-acquiring capabilities, or payment-orchestration tools that help retailers optimize acceptance costs across UPI, cards, and alternative payment methods.