{
  "id": 9706930,
  "title": "MDR on UPI payments above Rs 2,000 will not be passed on to consumers: Govt sources",
  "url": "https://urgent.news/2026/09/25/mdr-on-upi-payments-above-rs-2-000-will-not-be-passed-on-to-consumers",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-25T04:50:23.000Z",
  "source": {
    "name": "YourStory",
    "slug": "yourstory",
    "url": "https://yourstory.com/2026/09/mdr-on-upi-payments-above-rs-2000-will-not-be-passed-on-to-consumers-govt-sources"
  },
  "original_language": "en",
  "account": "Government sources have announced that the proposed 0.4% merchant discount rate (MDR) on UPI transactions exceeding Rs 2,000 will not be passed on to consumers. Starting October 15, merchants making UPI payments above Rs 2,000 to merchants will face this fee. However, no charge will apply to person-to-person transactions, regardless of the amount. No portion of the collected MDR will go to the government. Instead, it will be distributed among banks and other entities within the UPI ecosystem. Forty percent of the MDR collected will go to customers' banks, 30% to payment gateways, 20% to UPI apps, and 10% to the sponsoring bank of the UPI app. Banks and the Indian Banks Association will address concerns about MDR charges and their impact on users. The fee is not considered a tax, but is a fee merchants pay to process digital transactions. The government hopes to address concerns about consumers shifting back to cash due to the merchant fee on UPI. The Indian Banks Association will run an awareness campaign to dispel misconceptions about the 0.4% MDR on UPI transactions above Rs 2,000. The MDR aims to create a sustainable revenue framework for the digital payments ecosystem, and will be exempt for essential services and small merchants, with a dedicated fund set up to promote UPI usage among small businesses.",
  "summary": "Effective October 15, a 0.4% merchant discount rate will be levied on merchants for UPI transactions over Rs 2,000. However, no charge will be levied on person-to-person transactions regardless of the amount.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}