What is Merchant Discount Rate and how MDR will be calculated after revised UPI charges
As per the new rules, Person-to-Merchant (P2M) UPI payments above ₹2,000 will attract a 0.4 per cent Merchant Discount Rate (MDR).
The National Payments Corporation of India (NPCI) announced a 0.4% Merchant Discount Rate (MDR) for Unified Payments Interface (UPI) transactions exceeding ₹2,000. Customers will not be charged any fee for making UPI payments under the revised system. When a transaction value exceeds ₹2,000, merchants are required to pay a fee up to ₹300 for single transactions.
The MDR is calculated based on the transaction value and applies to Person-to-Merchant (P2M) UPI payments. Small merchants under the P2PM framework, which includes vendors receiving payments into their personal bank accounts, are exempt from MDR charges. Transactions of ₹75,000 or more will have a maximum charge of ₹300. For example, a ₹1,00,000 transaction would normally attract a 0.4% charge of ₹400, but due to the cap, merchants would only pay ₹300.
Certain categories like railways, telecom services, insurance, and fuel will incur a fixed MDR of ₹5 per transaction for payments above ₹2,000. The collected MDR from high-value transactions will be distributed among stakeholders in the UPI ecosystem to fund expansion, resilience, cybersecurity, and innovation.
Written by urgent.news from Hindustan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
