1 Essential UPI MDR Story for Indian Professionals
According to Press Monitor's tracking of Indian publications, media monitoring reveals that the National Payments Corporation of India has introduced a 0.4% Merchant Discount Rate on UPI payments, ending a six-year zero-MDR regime. This press review covers the key developments in print media monitoring and media intelligence surrounding the new framework.
1. NPCI Introduces 0.4% MDR on UPI Transactions Above Rs 2,000
A front-page report in Financial Express says the government’s notification opened the door to a merchant discount rate on UPI payments above 2,000 rupees, with the NPCI setting the rate at 0.4 percent on person-to-merchant payments above that threshold, capped at 300 rupees for transactions of 75,000 rupees and above, effective October 15. Person-to-person transfers stay free, as do all payments up to 2,000 rupees, consumers pay nothing, apps cannot levy platform fees, and merchants cannot pass the charge on. In 2025-26, transactions above 2,000 rupees made up only about 4 percent of person-to-merchant UPI payments by volume but roughly two-thirds by value, and the NPCI estimates running the network costs about 20,000 crore rupees a year.
Why it matters: The new MDR framework ends a six-year period of zero merchant fees on UPI, fundamentally changing the economics of India's most popular payment platform. With UPI accounting for 49% of global real-time payment volumes, the financial impact is significant. This news on UPI MDR charges affects merchants, consumers, and the broader digital payments ecosystem.
Key detail: The 0.4% charge applies to person-to-merchant transactions above Rs 2,000, capped at Rs 300 for transactions of Rs 75,000 and above. Person-to-person transfers remain free, as do all payments up to Rs 2,000. Consumers pay nothing, apps cannot levy platform fees, and merchants cannot pass the charge on to customers. In 2025-26, transactions above Rs 2,000 made up only about 4% of person-to-merchant UPI payments by volume but roughly two-thirds by value. The NPCI estimates running the network costs about 20,000 crore rupees a year.
Source: Financial Express, front-page report by Shyamal Majumdar, cross-referenced with The Hindu, Business Standard, Mint, Hindustan Times, Dainik Bhaskar, Rajasthan Patrika, Hindustan, and Millennium Post.
Next step: The Centre has advised banks to ensure merchants do not pass the MDR fee on to customers. Finance Minister Arun Jaitley stated that only 4% of merchant transactions will be affected, while the government has allocated 5% of total MDR earnings to a small merchant fund.
Closing: How will this MDR framework reshape the digital payments landscape for small merchants and consumers? Which of these moves matters most for your business?
