What MDR on UPI payments above Rs 2,000 means for you: FAQs answered

A Merchant Discount Rate (MDR) of 0.4% will be applicable on person-to-merchant UPI transactions above Rs 2,000 from October 15, 2026, as per the latest notification from NPCI. It is important to note that person-to-person transactions will continue to be free with no MDR applicable.Merchant Discount Rate (MDR) is essentially a fee that a merchant incurs when accepting payments for goods or services through credit or debit cards. It is generally calculated as a percentage of the transaction amount and is deducted by the bank before the remaining payment is credited to the merchant.Why is MDR being introduced for UPI transactions above Rs 2,000? What does this mean for the common man?