Reported UPI MDR from 15 October could add merchant costs on payments above ₹2,000
A Business Today report says Person-to-Merchant UPI transactions above ₹2,000 may attract 0.4% MDR from 15 October 2026, capped at ₹300 per transaction. If confirmed, the move could reshape merchant payment-cost decisions and incentives for larger digital transactions.
What happened
NPCI-linked rules will impose 0.4% MDR on Person-to-Merchant UPI payments above ₹2,000 from 15 October, capped at ₹300 for transactions of ₹75,000 or more.
Key facts
- 0.4% MDR
- ₹2,000 threshold
- ₹300 maximum MDR per transaction
- ₹75,000 transaction threshold for cap
- ₹3,000 payment: ₹12 MDR
What changed
NPCI-linked rules will impose 0.4% MDR on Person-to-Merchant UPI payments above ₹2,000 from 15 October, capped at ₹300 for transactions of ₹75,000 or more. Smaller payments and eligible small-merchant categories remain exempt.
Why this matters
If confirmed, a 0.4% MDR on UPI merchant payments above ₹2,000 would require retailers to reassess payment acceptance costs, checkout incentives and pricing for higher-value baskets.
What to watch
- Official NPCI, RBI, Ministry of Finance, or gazette notification confirming effective date, covered transaction definition, and legal basis.
- Clarification of whether the ₹2,000 threshold applies per transaction, per invoice, per day, or by merchant category.
- Published exemption rules for small merchants, government/essential payments, offline UPI, credit-on-UPI, and specific merchant categories.
- Rules on merchant pass-through or customer surcharging, including disclosure and consumer-protection obligations.
- Acquirer and payment-aggregator rate cards showing whether the stated 0.4% is fully passed through and whether additional gateway or settlement fees apply.