NPCI Committee To Decide UPI MDR Charges Soon; Large Merchant Transactions May Face Fees
The UPI and Services Steering Committee of the National Payments Corporation of India (NPCI) is likely to meet this week to finalise the merchant discount rate (MDR) framework for digital payments, according to a report by Moneycontrol. The meeting follows the government’s September 14 notification that formally introduced provisions related to MDR charges. NPCI operates both the Unified Payments…
The National Payments Corporation of India (NPCI) is set to decide on the UPI Merchant Discount Rate (MDR) charges soon, potentially affecting large merchant transactions within the next two weeks, according to a report by Moneycontrol. The NPCI's UPI and Services Steering Committee, comprising 22 members from various banks and industry bodies, is expected to finalize the MDR framework following a government notification on September 14.
Banks are barred from charging UPI transactions under ₹2,000 or payments through RuPay debit cards, but the committee will decide whether MDR applies to large merchants, leaving the final decision to the UPI Steering Committee chaired by Dilip Asbe and Sohini Rajola. The committee will also create a mechanism for distributing MDR income among ecosystem participants, such as issuing banks, UPI applications, PSP banks, and payment aggregators.
Analysts estimate that a 25-30 basis point MDR on transactions over ₹2,000 could generate around ₹13,000 crore annually, benefiting the digital payments ecosystem.
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