Retailers warn new UPI MDR could lift prices and trim festive discounts
Retailers Association of India and apparel makers say a 0.4% MDR on UPI merchant payments above ₹2,000, effective October 15, could pressure pricing and promotions despite a bar on direct consumer surcharges.
What happened
Retailers Association of India (RAI) · Indian retailers and apparel manufacturers warn that a 0.4% MDR on UPI merchant payments above ₹2,000 may lead to higher
Key facts
- 0.4% MDR levy
- UPI transactions over ₹2,000
- Effective October 15
- MDR capped at ₹300
- Cap applies to transactions of ₹75,000 and above
What changed
Indian retailers and apparel manufacturers warn that a 0.4% MDR on UPI merchant payments above ₹2,000 may lead to higher product prices or lower festive discounts, despite rules barring direct surcharge pass-through to consumers.
Why this matters
Prepare to absorb or offset the 0.4% UPI MDR on transactions above ₹2,000 through tighter promotional budgets, basket-building tactics, and payment-mix steering ahead of the festive season.
What to watch
- Official implementation notification, MDR scope, merchant-size exemptions and treatment of GST on the fee.
- Acquirer and payment-gateway communications on effective merchant pricing from October 15.
- Festive campaign revisions by major apparel, electronics, department-store and e-commerce retailers.
- Changes in UPI transaction value distribution, especially a rise in transactions clustered just below ₹2,000.
- Evidence of payment-mode steering at point of sale or online checkout.