UPI MDR: Who will pay, who won’t, and what the new rules mean
The Indian government has clarified that UPI payments will remain free for consumers and small merchants, despite new legislation allowing for potential Merchant Discount Rate (MDR) charges. Future fees, if implemented, would only apply to specific high-value business transactions above a set threshold.
Why it matters
This policy clarification is vital for maintaining public trust in digital payment infrastructure and supporting the continued adoption of UPI in India's economy.
Amid widespread discussion about transaction fees and merchant charges, the government on Saturday clarified that UPI will remain free for consumers and that small merchants will not incur charges for accepting digital payments. In fact, the MDR (Merchant Discount Rate) charges will be applicable for a few sets of merchant transactionsWhat did the government say?"As and when MDR charges are introduced, they will apply only to a limited set of merchant transactions above a certain threshold, at a nominal rate far lower than debit or credit card MDRs," the government said in a releaseThe vast majority of the transactions will remain free of charge for merchants on UPI.
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