Government Sets 0.4% MDR on Merchant UPI Transactions Above Rs 2,000

15 Sept 2026, 8:28 pm · 19h ago · 1 min read · YourStory

The Indian government has introduced a 0.4% Merchant Discount Rate on person-to-merchant UPI payments above Rs 2,000, ending the zero-MDR framework established in 2020. The fee is capped at Rs 300 for transactions of Rs 75,000 and above. Small merchants generating up to Rs 1 lakh monthly via UPI QR codes remain fully exempt, covering 96% of merchant transactions. Person-to-person transfers and transactions below Rs 2,000 remain entirely free of charges. Banks and payment apps are barred from levying platform fees or allowing merchants to pass fees to consumers.