NPCI to Levy 0.4% MDR on UPI Merchant Payments Above Rs 2,000 From October 15

Key facts

• The National Payments Corporation of India (NPCI) will introduce a 0.4 per cent merchant discount rate (MDR) on specified UPI person-to-merchant payments above Rs 2,000, effective October 15.
• For high-value merchant payments, the MDR will be capped at Rs 300 per transaction once the transaction value reaches Rs 75,000.
• UPI person-to-person payments and merchant payments up to Rs 2,000 will remain free, with around 96 per cent of P2M transactions expected to remain unaffected.
• Small merchants covered under the zero-MDR framework will continue to receive payments without MDR.
• The MDR is not a tax or government charge but a fee distributed among participants involved in processing and facilitating merchant payments.
• Banks have been advised to ensure that merchants do not pass the MDR charge on to customers.