Explained: Why the government is considering a merchant fee on selected high-value UPI transactions
The Centre has opened the door to introducing a nominal Merchant Discount Rate (MDR) on a limited set of UPI merchant transactions above a specified threshold, potentially marking a shift in how India’s rapidly expanding digital payments ecosystem is funded.
The proposed framework, however, does not mean that UPI payments will become chargeable for everyone. On Saturday, the Ministry of Finance clarified that consumers and person-to-person (P2P) transactions will continue to remain free, while any future MDR would be restricted to a limited category of merchant payments.
