UPI MDR Starts October 15: What the 0.4% Fee Changes
UPI has become a part of everyday life in India. From buying groceries to paying at restaurants, a quick QR scan is often all it takes to complete a payment, with no extra charge for the customer. The payment goes through, the merchant receives the money and, for the customer, there is usually no transaction fee to think about.
That experience is not changing on October 15. But some of the economics behind it are.
Under the revised framework, select person-to-merchant (P2M) UPI payments above ₹2,000 will attract a Merchant Discount Rate (MDR) of 0.4%. The merchant pays the charge, not the customer, and the fee is capped at ₹300 for transactions of ₹75,000 and above.
Most UPI payments will continue as before. Person-to-person (P2P) transfers remain free. Merchant payments up to ₹2,000 stay outside the MDR, while eligible small merchants continue to receive zero-MDR protection.
The government says approximately...
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