UPI MDR Charges: 0.4% Fee on Merchant Payments Above ₹2,000 From October 15

The National Payments Corporation of India (NPCI) has announced a revised Merchant Discount Rate (MDR) framework for certain UPI merchant transactions. According to the information provided, from October 15, an MDR of 0.4% will apply to individual-to-merchant payments above ₹2,000. The charge will be capped at a maximum of ₹300 per transaction. Regular consumers will continue to make UPI payments free of charge, while person-to-person (P2P) transfers and merchant payments of up to ₹2,000 will remain outside the MDR framework.

Small merchants have been exempted from the proposed MDR under the specified framework. Merchants receiving up to ₹1 lakh per month through QR-code payments into their bank accounts will not be subject to the charge. For specified categories such as railways, telecom, insurance and fuel, a flat MDR of ₹5 per transaction will apply to payments above ₹2,000. For mutual funds, securities, stock brokers and dealers, an MDR of 0.02% will apply, subject to a maximum of ₹300. NPCI has also stated that UPI apps should not impose platform fees or undisclosed charges on such transactions.