UPI MDR Relief? Indian Bank May Waive 0.28% Charge On Merchant Payments Above ₹2,000
Mumbai: Indian Bank is considering waiving its share of the Merchant Discount Rate (MDR) on certain UPI transactions, a move that could reduce payment costs for merchants. Indian Bank Managing Director and CEO Binod Kumar said the public sector lender is exploring the possibility of absorbing the 0.28 percent share that would otherwise go to the acquiring bank. What Indian Bank Is Considering A…
Indian Bank is contemplating waiving a portion of the Merchant Discount Rate (MDR) on certain UPI transactions, potentially reducing expenses for merchants. Managing Director and CEO Binod Kumar revealed that the public sector lender is exploring the option of absorbing the 0.28 percent share of the MDR that would otherwise be allocated to the acquiring bank.
The 0.4 percent MDR will be applicable to eligible person-to-merchant UPI payments exceeding Rs 2,000, effective from October 15, 2026. Around 0.28 percent of this amount is anticipated to be absorbed by Indian Bank instead of being charged to eligible merchants. The bank's strategy mirrors similar practices already followed for credit and debit card transactions.
Depending on transaction volumes, banks occasionally waive the entire MDR or charge a fraction of it. Indian Bank is currently examining whether a comparable approach can be implemented for UPI payments. Importantly, customers will not be required to pay the MDR, as it is a charge borne by merchants for processing digital payments.
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