Only 10% of chargeable UPI value at risk of MDR being passed to consumers, says NPCI

Only about 10% of the total value of UPI transactions subject to the new merchant discount rate (MDR) faces a risk of the charge being passed on to consumers, National Payments Corporation of India (NPCI) CEO Dilip Asbe said on Thursday, 24 September.

Speaking at the 13th SBI Banking and Economics Conclave in Mumbai, Asbe said 96% of transactions by volume and 75% by value will remain outside the charging framework. The MDR of 0.4% applies from October 15 to person-to-merchant UPI payments above Rs 2,000, capped at Rs 300 per transaction. Asbe said 80% of MDR collections will come from businesses with an annual turnover above Rs 1,000 crore that already accept credit cards and are unlikely to pass on the cost.

The remaining 10% segment, merchants with turnover above Rs 1 crore, may attempt to pass charges on to consumers, he said. Asbe added that NPCI is open to feedback and will review data before making changes. The government has directed banks not to pass MDR on to customers. A Rs 3,000 crore fund from MDR will be created to boost UPI acceptance among small merchants, Asbe said.

Update, 30 September 2026: Rediff.com, NDTV Profit, Livemint and Inc42 confirm NPCI CEO Dilip Asbe’s statement that only 10% of UPI chargeable value risks consumer pass-through. Inc42 adds that Asbe cited cybersecurity and AI investment needs for the MDR. Three rediff.com articles foreground a Rs 3,000 crore fund to be created from MDR for small merchants. Livemint also reports SBI expects MDR to help recover costs and potentially generate a small surplus.