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Centre to track daily pass-through of 0.4% UPI MDR
The Indian Express··17 Sept
The government will monitor daily from October 15 whether merchants pass on the new 0.4 percent Merchant Discount Rate on UPI transactions above Rs 2,000. Officials said comparisons will use year-ago figures. NPCI set an upper limit of Rs 300, with a flat Rs 5 fee for some goods and services. Person-to-person transfers face no charge.
Prism
What It Means For You
- Only person-to-merchant UPI payments above Rs 2,000 face the MDR; P2P transfers stay free.
- Of 2025-26 UPI traffic, about 30 percent were person-to-merchant and only 4 percent of those exceeded Rs 2,000.
- The incentive subsidy for UPI transactions under Rs 2,000 of up to 0.15 percent ends after October 15.
What's Happening
- Officials said the government is working with payment aggregators to explain the new charges to merchants.
- Industry estimates put annual UPI system costs around Rs 20,000 crore.
- The revised MDR framework is expected to fetch around Rs 15,000 crore a year, industry officials said.
Fee Caps and Carve-outs
- A lower 0.02 percent fee applies on certain capital market transactions.
- Recurring UPI payments such as OTT subscriptions and SIP investments will not face a fee.
- UPI became free of MDR only in 2020, the report said.
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