Proposed UPI MDR framework targets larger merchant transactions, keeps consumer payments free
Startup Policy Forum says the proposed framework would levy 0.4% MDR on UPI transactions above ₹2,000, while merchants receiving up to ₹1 lakh a month would pay no fee. Consumer payments, P2P transfers and AutoPay would remain free; no rollout date has been stated.
What happened
Startup Policy Forum says proposed UPI MDR would remain free for consumers, P2P transfers and AutoPay. A 0.4% merchant-paid fee may apply to transactions above
Key facts
- 0.4% MDR
- ₹2,000 transaction threshold
- ₹1 lakh monthly merchant-receipts threshold
What changed
Startup Policy Forum says proposed UPI MDR would remain free for consumers, P2P transfers and AutoPay. A 0.4% merchant-paid fee may apply to transactions above ₹2,000, while merchants receiving up to ₹1 lakh monthly would pay zero MDR.
Why this matters
A proposed 0.4% UPI MDR on transactions above ₹2,000 would raise payment-acceptance costs for larger merchants while preserving free consumer, P2P and AutoPay usage.
What to watch
- Formal RBI, NPCI, Ministry of Finance, or government consultation/recommendation confirming the proposed rate, threshold, and effective date.
- Whether the ₹1 lakh monthly exemption applies per merchant, per QR/account, per acquiring bank, or across merchant entities.
- Merchant association response and evidence of surcharge, minimum-purchase, or payment-steering behavior.
- Changes to UPI incentive subsidies, PSP reimbursement rules, or bank/acquirer interchange economics.
- Transaction-volume mix above ₹2,000, especially in grocery, fuel, travel, healthcare, electronics, and marketplace checkout.