The National Payments Corporation of India (NPCI) announced a revised merchant discount rate (MDR) for a subset of UPI purchases that involve a payer and a merchant. Under the new guideline, UPI payments above ₹2,000 will incur an MDR of 0.4% in eligible transactions.
What changes for participants
- Applicable to select UPI person-to-merchant (P2M) transactions processed through participating banks and payment service providers.
- The 0.4% MDR applies only to payments exceeding ₹2,000; smaller-value UPI transfers remain unaffected.
- NPCI said the policy aims to address the cost dynamics of higher-value digital payments while preserving a frictionless user experience.
Merchants and fintech players will oversee how this MDR is passed along, with the exact implementation timeline and eligible channels to be shared by NPCI and participating PSPs in due course.
