RBI Backs MDR on Large-Value UPI Transactions, Says Could Help Expand UPI Acceptance
The central bank said the fee will support long-term sustainability and investment in India’s digital payments network.
- On Tuesday, the Reserve Bank of India announced a 0.4 per cent Merchant Discount Rate on UPI transactions exceeding ₹2,000, effective October 15, 2026, to strengthen the long-term sustainability of India's digital payments ecosystem.
- Ending nearly six years of fully free UPI payments, the government introduced this fee structure to support continued scaling, innovation, and investment across the digital payments network.
- Importantly, all person-to-person transfers and person-to-merchant payments below ₹2,000 remain free for users; the finance ministry clarified that "Customers will not be required to pay any charge when making such payments through UPI."
- Since launching on August 25, 2016, UPI has transformed India's landscape, with transaction values surging more than 4,000-fold over the decade; Uzbekistan recently became the 11th country accepting the platform.
- The RBI stated a fair distribution of MDR among ecosystem participants supports continued investment in technology and infrastructure, emphasizing the system will remain "safe, seamless, affordable, and accessible.
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Why RBI Backs UPI MDR For Transactions Over Rs 2,000
The Reserve Bank of India (RBI) has endorsed the introduction of a Merchant Discount Rate (MDR) on UPI transactions exceeding Rs 2,000, effective October 15. This move, which levies a 0.4 per cent fee on merchant payments above the threshold, aims to bolster the long-term sustainability and growth of India's digital payments ecosystem. The RBI clarified that person-to-person (P2P) transactions and small person-to-merchant (P2M) payments below Rs…
The Economic Times
Times of IndiaRBI backs MDR on large-value UPI transactions, says could help expand UPI acceptance
The Reserve Bank of India supports Merchant Discount Rate on large UPI transactions. This move aims to ensure the long-term sustainability of India's digital payments ecosystem. New provisions will apply MDR to person-to-merchant transactions exceeding two thousand rupees. Person-to-person transactions and smaller merchant payments will remain free of charge.
RBI backs MDR on large-value UPI transactions, says move will strengthen ecosystem
The RBI has backed the government's new MDR framework for large-value UPI merchant payments, saying it will support investment in technology and infrastructure while keeping UPI free for users.
New Delhi, Sep 15 (IANS) The Reserve Bank of India (RBI) on Tuesday said that the imposition of MDR on high-value UPI transactions is an important step towards strengthening the long-term sustainability of India's digital payments ecosystem. The central bank said in a statement that this will help UPI expand its reach, introduce new features, and continue to provide services to customers and businesses across the country. The RBI, in a post on t…
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