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UPI volumes hit 145 billion in H1 FY27, up 27%, as 0.4% merchant MDR takes effect October 15
UPI processed around 145 billion transactions in H1 FY27, up 27% from 114 billion a year earlier. From October 15, merchants will pay a 0.4% MDR on UPI payments above Rs 2,000, while person-to-person payments remain free.
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Channel facts
Figures from Times of India,
| H1 FY27 UPI value: | Rs 177 lakh crore |
|---|---|
| MDR cap for transactions of Rs 75,000 or more: | Rs 300 |
| Small merchant exemption share of merchant transactions: | 96% |
| Flat fee on railways, telecom, fuel, insurance above Rs 2,000: | Rs 5 |
| September UPI transaction volume: | 24.07 billion |
| Countries accepting UPI: | 11 |
What it means for online and offline
Paid UPI acceptance makes checkout cost a live variable, so payment orchestration, acquiring and omni-channel POS assets that route or optimise fees look more strategic, but underwrite them on post-October 15 volume data rather than pre-MDR growth.
Signals to track
- Monthly UPI volume and value prints for October and November against the H1 FY27 pace of roughly 145 billion transactions, up 27%
- Any shift in the share of UPI payments above Rs 2,000 versus below it
- Retailer or e-commerce announcements of UPI surcharges or card-linked discounts
- A regulator circular that clarifies, exempts or defers the 0.4% MDR or the flat Rs 5 categories
- Q3 FY27 earnings commentary from retailers and payment firms on MDR cost pass-through
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Large omni-channel retailers are likely to renegotiate acquiring terms, and some may introduce checkout incentives or surcharges that steer high-value baskets away from UPI.
- Payment apps and acquiring banks may begin passing the 0.4% MDR through to merchants and promote merchant-side tools, since revenue now attaches to UPI acceptance.
- Card networks and wallet or BNPL providers are likely to market themselves against UPI for payments above Rs 2,000, where the new MDR applies.
- Small merchants may push customers toward sub-Rs 2,000 payments or split bills to stay under the threshold, and some may fall back to cash.
- The regulator is likely to issue clarifications on category classification and the Rs 300 cap. It may face pressure for exemptions if merchant complaints build after October 15.