UPI may add MDR above ₹2,000, putting large-merchant payments in focus
A reported proposal could levy a 0.25%-0.4% merchant discount rate on UPI payments above ₹2,000, primarily affecting larger retailers. P2P transfers and most routine payments are expected to stay free, but thresholds, rates and timing remain undecided pending approvals and RBI guidance.
What happened
India may introduce merchant discount rates on UPI transactions above ₹2,000, mainly affecting large merchants. Consumer-to-consumer transfers and most routine
Key facts
- ₹2,000 proposed transaction threshold
- 0.25%-0.4% proposed MDR range
- 25-30 basis points under discussion
- 5% of UPI transactions by volume
- 65% of UPI transaction value
- 23.7 billion UPI transactions in July
- ₹29.9 lakh crore UPI transaction value in July
- 88% of digital transactions
Why this matters
The proposal could improve monetization prospects for payment-acquiring and merchant-services platforms serving large retailers, though no deal thesis should assume implementation before final policy details emerge.