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UPI merchant fee of 0.4% starts 15 October
Livemint··4d ago
A proposed 0.4% merchant discount rate on UPI payments above Rs 2,000 from 15 October ends India's zero-MDR UPI era, Mint reported. Merchants pay the charge; MDR on Rs 75,000-plus transactions is capped at Rs 300. Elara estimates Nykaa could face Rs 29.9 crore annualised costs, about 2.6% of estimated FY27 Ebitda, while jewellers say most sales cross the threshold.
Prism
What It Means For You
- The finance ministry said on 15 September that merchants must not pass MDR to customers and UPI apps cannot add platform fees.
- Consultant Ankur Bisen said some shoppers may split bills or plan purchases that were previously impulse buys.
- The Organic World founder said his stores would initially absorb costs on baskets that exceed Rs 2,000.
What's Happening
- FirstCry's India multi-channel business reported an average order value of Rs 2,284 in FY26, above the new threshold.
- Lenskart sits in higher-ticket eyewear where orders more often exceed Rs 2,000, though it does not disclose AOV.
- Elara estimated DMart could see a 2.1% FY27 Ebitda impact while Trent's mixed baskets leave about 0.5%.
How retailers may respond
- Jewellery, electronics and some fashion categories often clear Rs 2,000 per transaction, analysts said.
- Indian Bullion and Jewellers Association national secretary Surendra Mehta said even small jewellers would pay MDR on most sales.
- Bisen said rising business costs may lead merchants to raise prices or reduce product size while holding price points.
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