UPI 0.4% MDR Fee From Oct 15: What Remains Free, Who Pays And Ecosystem Impact
Starting October 15, mid and large-sized merchants will be subject to a 0.4 percent Merchant Discount Rate on UPI transactions above 2,000 rupees, capped at 300 rupees for payments exceeding 75,000 rupees. The fee is strictly payable by merchants, with banks and the NPCI advising that costs must not be passed onto consumers. Person-to-person transfers and merchant transactions up to 2,000 rupees remain entirely free, alongside exemptions for small vendors receiving up to 1 lakh rupees monthly. Flat charges apply to essential services, while capital market payments attract a 0.02 percent fee. The collected revenue will be distributed across payer banks, merchant banks, UPI apps, and payment service providers.
