RBI introduces MDR on large-value UPI merchant payments

15 Sep 2026 Banking

On 15 September 2026 the RBI announced a Merchant Discount Rate (MDR) on select person-to-merchant UPI payments above Rs 2,000, effective 15 October 2026. Person-to-person transfers and merchant payments up to Rs 2,000 stay free.

Important Facts

  • Announced: 15 September 2026; effective: 15 October 2026
  • MDR of 0.4% on select P2M UPI transactions above Rs 2,000, capped at Rs 300 above Rs 75,000
  • Flat Rs 5 per transaction above Rs 2,000 for identified categories such as railways, telecom, insurance, fuel and agriculture inputs
  • All P2P transfers and merchant payments up to Rs 2,000 remain free
  • Aim: long-term sustainability of the UPI ecosystem
Exam Point: MDR = fee a merchant pays its bank for accepting digital payments. UPI is operated by NPCI.

Source: Outlook Business

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