NPCI announces MDR for UPI; merchant transactions above Rs 2,000 to attract 0.4% charge

The National Payments Corporation of India (NPCI) announced a 0.4% merchant discount rate (MDR) on Unified Payments Interface transactions for person-to-merchant payments above 2,000 starting October 15, keeping small-ticket transactions outside its remit.

There will be no charge on peer-to-peer payments. The average merchant payment was 577 in August, indicating most transactions will not face this charge.

UPI payments are currently free. The levy, being reintroduced after six years, meets the long-standing demand of the digital payments industry to help ensure financial viability.