NPCI CEO Dilip Asbe Addresses UPI MDR Concerns, Says 96% Transactions Below ₹2,000 Won’t Face Charges

NPCI CEO Dilip Asbe addressed concerns surrounding the revised Merchant Discount Rate (MDR) framework for UPI transactions during a speech at the SBI Banking and Economics Conclave. Asbe assured that 96% of UPI transactions, valued below ₹2,000, would remain unaffected by the new MDR structure. Around 75% of the transaction volumes would also not fall under the new MDR rules.

The NPCI is working to clarify and provide accurate information to businesses about the MDR impact on merchants, especially those who do not currently accept credit card payments, accounting for approximately 10% of transaction value. These merchants might face challenges in passing on MDR costs to customers, as credit card transactions typically attract MDR charges between 1.5% and 2.5%.

NPCI introduced a revised MDR framework, effective October 15, under which UPI transactions above ₹2,000 will attract a 0.4% MDR, capped at ₹300 for transactions of ₹75,000 and above. The revenue generated from MDR or cost recovery will be invested in enhancing the payments ecosystem, focusing on merchant acceptance tools and consumer technologies like artificial intelligence and voice-based payments.