UPI panel may set MDR on merchant payments above ₹2,000

A 22-member UPI and Services Steering Committee is expected to decide on merchant discount rate charges, with a possible tiered 0.3%-0.5% levy for transactions above ₹2,000. Consumers and small-ticket merchants could remain exempt.

— Source publishedTue, 15 Sept, 2026, 17:05 IST·First seen Tue, 15 Sept, 2026, 17:07 IST·Source Mint · Money

What happened

UPI steering committee is expected to decide MDR for merchant transactions above ₹2,000, potentially using a tiered 0.3-0.5% charge. Consumers and low-value

Key facts

  • ₹2,000
  • 0.3%
  • 0.3-0.5%
  • 0.33%
  • 0.40%
  • ₹2,000 crore
  • ₹2,196.21 crore
  • ₹1,922.77 crore
  • 22-member

Why this matters

The possible return of MDR on higher-value UPI transactions may increase the strategic value of acquiring or partnering with payment orchestration, acquiring and merchant-fintech platforms.

What to watch

  • Formal Steering Committee recommendation, government notification and effective date.
  • Whether the ₹2,000 threshold applies per transaction, per merchant-day, per category or only to specified large merchants.
  • Final MDR rate, interchange split, GST treatment and whether payment aggregators can add separate fees.
  • Exemptions for small merchants, QR-only merchants, essential categories, government-linked payments or specific transaction types.
  • Government commitment to subsidize PSPs and banks, which could preserve merchant zero-MDR economics.
  • Merchant association response and evidence of payment-method steering by large retail, jewellery, electronics and travel chains.
  • UPI transaction mix changes: value growth above ₹2,000, merchant acceptance expansion and card/credit-on-UPI substitution.
  • Model MDR exposure by average UPI ticket size, category mix and share of transactions above ₹2,000 rather than by total UPI volume.
  • Prepare payment-routing rules that favor the lowest-cost rail for high-value transactions while preserving UPI convenience for low-ticket purchases.
  • Review merchant contracts with payment aggregators and banks for MDR pass-through clauses, settlement fees and pricing renegotiation rights.
  • Test customer messaging and offers that avoid explicit payment surcharges but can steer high-ticket purchases toward cards, EMI, bank transfer or retailer financing.
  • Prioritize reconciliation, fraud controls and checkout optimization because a paid UPI model raises the value of authorization and conversion improvements.

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