World · India Bureau
India to impose MDR charges on UPI payments from October 15
The National Payments Corporation of India has announced the introduction of Merchant Discount Rate (MDR) charges on UPI transactions exceeding 2,000 rupees, effective October 15. The new levy will apply only to select merchants receiving payments above the threshold.
LSN India ·
India's digital payments landscape is set to shift with the introduction of MDR charges on UPI transactions, marking a significant policy change for the country's most widely-used payments platform. The charges will come into effect from October 15, according to official announcements.
The MDR levy will apply specifically to merchants who receive UPI payments exceeding 2,000 rupees per transaction. This targeted approach means that transactions below the threshold will remain free of charges, preserving the cost-free nature of UPI payments for smaller transactions that form the bulk of digital commerce in the country.
The decision affects only a subset of merchants engaged in higher-value transactions. Small traders, retailers, and service providers processing payments below 2,000 rupees will not face any additional charges, ensuring that the affordability advantage of UPI for everyday transactions remains intact.
The introduction of MDR charges represents a structural shift in how payments are monetized within India's digital ecosystem. Industry observers note that this move could influence merchant behavior and payment choices for transactions above the threshold, potentially affecting the platform's growth trajectory in the high-value payment segment.
Merchants are advised to review their payment processing strategies and cost structures ahead of the October 15 implementation date to understand the financial impact of the new charges on their operations.