No question of rollback of 0.4% MDR charges on UPI transactions over ₹2,000: Top government official
The Indian government has confirmed it will not roll back the 0.4% Merchant Discount Rate (MDR) on UPI transactions exceeding ₹2,000 starting October 15. Officials state the move is necessary for the financial sustainability of the UPI ecosystem, despite opposition from traders and political parties.
Why it matters
This policy shift marks the end of a long-standing zero-fee model for India's massive digital payment infrastructure, impacting millions of users and merchants.
There is no question of a rethink on the issue of imposition of 0.4% MDR charges on Unified Payments Interface (UPI) transactions over ₹2,000, government sources said on Wednesday (September 16, 2026).
A top official, when asked whether the government was considering rolling back the proposed Merchant Discount Rate charges on UPI transactions above ₹2,000, to be implemented from October 15, said a decision has been taken and there was no question of reversing it.
Sources said the decision to impose MDR charges was taken in the larger interest of the UPI ecosystem and to strengthen its safety and security.
The decision to levy charges, as prevalent in other countries, was taken at the time of introduction of UPI system in 2020, sources said, adding that new the MDR framework will make UPI self-sustainable.
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