UPI MDR may return for payments above ₹2,000 at large merchants

India is reportedly weighing a 0.05%-0.07% MDR on UPI transactions above ₹2,000 for high-turnover merchants, while exempting most small businesses. No formal proposal has been announced.

— Source publishedFri, 31 Jul, 2026, 17:11 IST·First seen Fri, 31 Jul, 2026, 17:33 IST·Source Inc42 · Buzz

What happened

India is reportedly considering a 0.05%-0.07% MDR on UPI payments above ₹2,000 at large merchants, while exempting most small businesses. The move could improve

Key facts

  • 0.05%-0.07% proposed MDR
  • ₹1 Cr-₹1.5 Cr annual merchant turnover threshold
  • UPI transactions above ₹2,000
  • 2,272 Cr UPI transactions in June
  • ₹28.92 lakh Cr June transaction value
  • 90% of UPI merchants potentially exempt
  • ₹437 Cr FY26 RuPay and BHIM UPI incentive outlay
  • 228.3 Bn UPI transactions in 2025
  • ₹4,000-5,000 Cr estimated annual P2M subsidy requirement

Why this matters

Payment platforms should use the potential MDR reset to deepen acquiring-bank and enterprise-merchant partnerships, positioning bundled acceptance, reconciliation and loyalty services for large retailers.

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