UPI MDR puts big-ticket retail payments in focus

India’s new merchant discount rate (MDR) on high-value UPI transactions is set to raise payment costs for retailers just as the festive shopping season gathers pace, though the impact is likely to vary sharply with the size of the shopping basket.

Large-format retailers selling electronics, apparel, jewellery and sports goods, transactions above Rs 2,000 are common, and UPI is increasingly being used for such purchases. Smaller-ticket businesses and online platforms, by contrast, are likely to see a more limited impact because a larger share of their transactions falls below the threshold.