MDR Introduced on UPI P2M Transactions Above ₹2,000
· Business · Zee News, Economic Times, Moneycontrol
India’s National Payments Corporation of India (NPCI) has introduced a merchant discount rate (MDR) on peer-to-merchant (P2M) UPI transactions exceeding ₹2,000. The move, effective immediately, applies to transactions where users pay businesses or merchants via UPI, marking a shift from the earlier zero-MDR policy for such transactions. The new rule aims to boost formalisation of the digital payments ecosystem and increase revenue for banks and payment processors. Users will now face a small fee on transactions above ₹2,000, though the exact MDR percentage has not been disclosed. The change could impact frequent digital shoppers and small businesses relying on UPI for transactions.
Why it matters
Consumers making high-value UPI payments to merchants will now incur a fee, potentially reducing transaction volumes for large purchases. Small businesses and merchants may see a slight increase in operational costs, while banks and payment networks stand to gain from the new revenue stream. The move could also influence how users split payments to avoid the MDR, impacting daily spending habits.
Read the original report — Zee News
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