Now Reading: UPI MDR set at 0.4% for merchant payments above Rs 2,000
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UPI MDR set at 0.4% for merchant payments above Rs 2,000
The government on Tuesday announced a 0.4% Merchant Discount Rate (MDR) on person-to-merchant UPI transactions above Rs 2,000, effective October 15. The MDR is capped at Rs 300 for transactions of Rs…
The government on Tuesday announced a 0.4% Merchant Discount Rate (MDR) on person-to-merchant UPI transactions above Rs 2,000, effective October 15. The MDR is capped at Rs 300 for transactions of Rs 75,000 and above. The finance ministry said customers will not pay the fee, it will be borne by merchants and distributed among banks and payment providers to fund infrastructure, cybersecurity and innovation.
Person-to-person transfers and payments below Rs 2,000 remain free. Small merchants receiving up to Rs 1 lakh a month via UPI QR codes under the P2PM category are also exempt. Only about 4% of merchant transactions are expected to be affected, the ministry said. Separate flat rates apply for railways, telecom, fuel and insurance (Rs 5 per transaction above Rs 2,000) and capital markets (0.02% capped at Rs 300). The move ends the zero-MDR regime that began in January 2020.
Indian Opinion Analysis
Coverage across outlets is uniformly neutral, reporting the finance ministry's announcement with no critical or pro-government slant. Livemint, ABP Live, New Indian Express and Inc42 all lead with the headline facts: the 0.4% rate, the Rs 2,000 threshold and the October 15 effective date. All clearly state that customers are not charged, and all note the exemptions for small merchants and P2P transfers. The framing difference is minimal: New Indian Express provides the most detailed sector breakdown, while Inc42 and ABP Live keep the focus on FAQ-style explanation. The absence of opposition or industry criticism in any source suggests the announcement was coordinated and uncontested at this stage. The key figure to track is the actual share of transactions that will attract MDR, which the ministry estimates at 4%.
The new MDR ends six years of zero-fee UPI merchant payments, a policy credited with driving mass adoption but criticised by banks as unsustainable.
Coverage: 5 sources, 5 neutral
Sources (5): livemint.com (neutral report), news.abplive.com (neutral report), news.abplive.com (2) (neutral report), newindianexpress.com (neutral report), inc42.com (neutral report)
This brief was synthesised by AI from the 5 sources linked above, so one read covers every framing they carry.
Updated: this story now draws on 5 sources.
