NPCI announces MDR for UPI; merchant transactions above Rs 2,000 to attract 0.4% charge
While NPCI has not specified a threshold based on the size of a merchant’s turnover, it said in its announcement that vendors operating under the person-to-person merchant (P2PM) category will “enjoy a mandatory zero MDR”. Merchants in this category, typically small shopkeepers, street vendors and local businesses, are classified as those receiving less than Rs 1 lakh per month in their accounts…
The National Payments Corporation of India (NPCI) has recently announced the Merchant Discount Rate (MDR) for Unified Payments Interface (UPI) transactions. Starting from October 15, merchants will face a 0.4% charge on person-to-merchant payments exceeding Rs 2,000. The MDR will be capped at Rs 300 per transaction for payments of Rs 75,000 and above.
For specific merchant categories like railways, telecom services, insurance, and fuel, NPCI has set a flat MDR of Rs 5 per transaction for payments above Rs 2,000. The government had previously restored MDR on UPI transactions, and NPCI has not specified a merchant turnover threshold. However, vendors operating under the person-to-person merchant (P2PM) category, such as small shopkeepers, street vendors, and local businesses, will face a mandatory zero MDR.
Merchant discount rates are distributed within the UPI ecosystem to enhance infrastructure resilience, innovation, cybersecurity, and customer service.
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