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UPI MDR: What Changes for Merchants, Consumers and Payments Above Rs 2,000 From October 15
Banks will charge merchants a 0.4% fee on eligible UPI payments above Rs 2,000, while customers and person-to-person transfers stay free.
- Starting October 15, 2026, India will impose a 0.4% Merchant Discount Rate on UPI Payments Above Rs 2,000, though customers remain Exempt from any fees.
- The zero-MDR regime cost roughly Rs 20,000 crore annually to maintain, prompting RBI Governor Sanjay Malhotra to note that "someone has to pay the cost" for infrastructure sustainability.
- While the standard rate is 0.4% capped at Rs 300 per transaction, Small traders and payments below Rs 2,000 remain Exempt; mutual fund payments face 0.02%, while Petrol and Certain utilities charge a fixed Rs 5.
- The Payments Council and NPCI have prohibited platform fees on UPI, requiring the Industry to ensure Merchants do not pass MDR costs directly to customers.
- To support adoption, 5 per cent of total MDR collections will fund UPI expansion for Small Merchants in underserved markets, balancing the financial needs of the Industry with continued growth across India.
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New UPI regime from Oct 15: Nominal fee on large merchant transactions, person-to-person transactions to remain free - The Tribune
The government decision to levy 0.4% fee on Rs 2,000 plus transactions made to merchants via UPI has triggered a debate around objectives of the move and whether this will harm consumers.
·Chandigarh, India
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NPCI has changed the rules regarding UPI. Starting October 15th, a new framework for UPI Merchant Discount Rate (MDR) will be implemented for select merchant transactions. A 0.4% charge will apply to UPI payments exceeding 2,000. The maximum charge per transaction will be approximately ₹300. For transactions of ₹75,000 or more, the MDR will be a maximum of ₹300 per transaction. However, for payments up to ₹2,000, no fees will be charged. See...
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Total News Sources13
Leaning Left2Leaning Right6Center0Last UpdatedBias Distribution75% Right
Bias Distribution
- 75% of the sources lean Right
75% Right
L 25%
R 75%
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