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UPI Charges From October 15: 0.4% MDR on Merchant Payments Above ₹2,000, Consumers Pay Nothing
How much will you now have to pay for UPI payments above ₹2,000? Can large businesses or shopkeepers charge customers a merchant discount rate? What will be the maximum fee? Read this explainer to find answers to these questions.
A significant reform will come into effect in the domain of digital payments. According to the statement made by the NPCI, there will be a charge for Merchant Discount Rate (MDR) levied on some of the selected merchant payments from 15th October. MDR is the charge paid by the banks or other payment intermediaries to merchants or merchants accepting digital payments (debit cards, credit card, UPI, etc.). There will be no charge on the public for any transaction. It can be used for free of cost, just like earlier.
There will be no charge on all individuals and all transactions. 95% of all merchant transactions through UPI are below ₹2,000. MDR on all such transactions will be zero. All customers or merchants using digital payments above ₹2,000 will be charged a uniform MDR of 0.4%. In case, the payment is ₹75,000 or more, then MDR will be capped at ₹300.
- For sectors such as railways, telecom, insurance, and fuel, a flat MDR of ₹5 has been set for transactions above ₹2,000.
- For capital-market payments such as mutual funds and stockbrokers, the rate will be only 0.02% (up to a maximum of ₹300).
- Small merchants earning up to ₹1 lakh per month through UPI will be fully protected.
NPCI has stated that the entire burden of MDR will be borne solely by merchants and cannot be passed on to customers under any circumstances. This means that when you pay by scanning a QR code at a store, you will not incur any additional platform fees or transaction charges. You will only pay the price listed for the product or service at the store. Furthermore, transactions between individuals (such as sending money to friends or family) will remain completely free.
