Govt Notifies New Rules, No MDR For UPI Transactions Under ₹2,000
Opening doors for the reintroduction of the merchant discount rate (MDR) on high-value UPI payments, the finance ministry has notified…
The finance ministry has recently issued a notification amending the Payment and Settlement Systems Act (PSSA), 2007, to reintroduce the merchant discount rate (MDR) for UPI transactions exceeding ₹2,000. In the gazette notification dated September 14, the ministry directed banks and system providers to refrain from imposing any charges on RuPay-powered debit cards and UPI payments up to ₹2,000.
The government has now specified the threshold beyond which UPI payments can be charged with the potential rate of 40 basis points (0.4%) of the transaction value. Banks are expected to benefit the most from the implementation, possibly receiving 40% of the MDR fee, with the rest shared equally among third-party application providers (TPAPs) and acquiring banks.
The NPCI is currently working on the framework, with a detailed notification anticipated in the coming weeks.
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