Government issues new framework for UPI transactions and MDR charges

The record

Written from the 1 report below. Nothing here is unsourced.

The Indian government has issued a new framework for UPI transactions and Merchant Discount Rate (MDR) charges.
Person-to-person UPI payments will remain completely free regardless of the amount, and these make up about 70 percent of total UPI transaction value.
Merchant payments up to Rs 2,000 will also carry no MDR, and small merchants earning up to Rs 1 lakh a month through UPI QR codes will pay zero MDR.
Regular merchant transactions above Rs 2,000 will attract a 0.4 percent MDR capped at Rs 300 per transaction, paid by the merchant and not the customer, while essential services like fuel, railways, telecom and insurance above Rs 2,000 will attract a flat Rs 5 MDR.
The framework matters because UPI has been free for 10 years, and users worry merchants or apps could pass the new costs on to customers despite government instructions against this.

Whether banks and merchants actually absorb the MDR without passing costs to customers through higher prices or cash-payment preferences.
Whether UPI apps introduce platform fees or hidden charges despite being barred from doing so.
How the zero-MDR threshold for small merchants earning up to Rs 1 lakh monthly is monitored and enforced.

Who is affected first and what likely follows, with a direction and a horizon. Extracted from the reports, never invented.

1 report

Indian-language1

All filed from IndiaSingle origin

Named India · Government of India · National Payments Corporation of India

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