Government clarifies credit-card linked UPI payments exempt from 0.4% MDR
Regulators have clarified that UPI transactions funded via credit cards will not incur the proposed 0.4% merchant discount rate, even as the payments ecosystem prepares for a revamped pricing regime starting October 15.
- Effective date: The updated UPI fee structure is slated to come into effect on 15 October.
- Fee mechanics: Direct account-to-merchant UPI payments above ₹2,000 will carry a 0.4% MDR, with a maximum charge of ₹300 per transaction.
- Exemption: Credit-card linked UPI payments are exempt from the 0.4% MDR.
- Impact: The clarification aims to reduce cost uncertainty for consumers and merchants ahead of the rollout, while operators adjust fee models.
- Context: This step is part of a broader review of UPI pricing aligned with payment methods and risk management.
