UPI MDR proposal targets payments above ₹2,000 while shielding small merchants
A proposed RBI-linked framework would levy 0.4% MDR on person-to-merchant UPI payments above ₹2,000, capped at ₹300. Merchants receiving up to ₹1 lakh monthly through UPI QR codes would remain exempt, with details expected within three months.
What happened
Proposed UPI MDR would charge large merchant payments above Rs 2,000 while protecting consumers and small merchants. Revenue is intended to sustain payments
Key facts
- 0.4% MDR on person-to-merchant UPI transactions above Rs 2,000
- MDR capped at Rs 300 for transactions of Rs 75,000 and above
- More than 95% of UPI merchant-payment volumes are transactions up to Rs 2,000
- Estimated annual UPI infrastructure cost: Rs 20,000 crore
- Proposed MDR split: 40% issuing bank, 30% UPI app, 30% acquiring bank
- Small merchants receiving up to Rs 1 lakh monthly via UPI QR codes retain zero MDR
- Rs 700 crore proposed fund for merchant onboarding and acceptance infrastructure
Why this matters
Prioritize targets or partnerships that help large merchants optimize payment routing and offset MDR exposure, while recognizing that small-merchant UPI acceptance remains protected under the proposed exemption.