New UPI payment fees: What the 0.4 per cent MDR means for merchants and customers
The government’s decision to introduce a Merchant Discount Rate (MDR) on higher-value transactions through the Unified Payments Interface (UPI) marks a shift in the way the country’s primary digital payment network is funded, after years of concerns from the payment sector that the annual funding allocated for UPI did not match the actual cost of operating it.
Starting October 15, a 0.4 per cent MDR will be imposed on UPI transactions from individuals to merchants exceeding Rs 2,000. Merchants, not consumers, will pay the fee, which will be capped at Rs 300 for transactions of Rs 75,000 and above.
