SBI sees surplus potential from proposed UPI MDR, leveraging issuer and acquirer scale
SBI expects proposed MDR on UPI payments above Rs 2,000, due from October 15, 2026, to cover processing costs and potentially generate a surplus. Its exposure spans issuing, acquiring, gateway and app roles, making the policy relevant to merchant payment economics.
What happened
State Bank of India (SBI) · SBI expects to recover costs and potentially earn surplus from proposed UPI MDR charges, aided by its issuing and acquiring-bank
Key facts
- UPI payments above Rs 2,000: 0.4% MDR
- October 15, 2026
- Issuing bank fee: 0.40%
- Acquiring bank fee: 0.30%
- Payment gateway fee: 0.20%
What changed
SBI expects to recover costs and potentially earn surplus from proposed UPI MDR charges, aided by its issuing and acquiring-bank scale, payment gateway and UPI app presence. It is assessing transaction-splitting risks and systems pressure.
Why this matters
Retailers should model a potential 0.4% fee on UPI payments above Rs 2,000 from October 2026, as it could raise acceptance costs for higher-ticket transactions and alter checkout economics.
What to watch
- Final government, NPCI and RBI notification confirming the October 15, 2026 start date, transaction threshold, MDR cap and applicability.
- Whether MDR is paid by merchants, subsidized by government, shared across issuers/acquirers/apps, or subject to merchant-category exemptions.
- Rules on consumer surcharging or differential pricing at online and physical points of sale.
- Merchant association responses, especially from small-business, retail, travel and e-commerce groups.
- UPI transaction-value growth above Rs 2,000 versus transaction-volume trends after implementation.