Why Insurance Payments via UPI Are Exempt From MDR Charges
· Business · Moneycontrol
The National Payments Corporation of India (NPCI) has clarified that insurance premium payments made through Unified Payments Interface (UPI) are exempt from the 0.4% Merchant Discount Rate (MDR). This exemption applies specifically to person-to-merchant (P2M) transactions where the merchant is an insurance provider. The decision aims to encourage the digital adoption of insurance products by removing transaction costs for policyholders. While other retail merchant transactions may attract MDR, the insurance sector remains excluded to facilitate broader financial inclusion. The policy ensures that customers do not face additional charges when paying premiums directly through their preferred UPI apps.
Why it matters
This exemption lowers the cost of digital insurance payments for millions of Indian policyholders, incentivizing the shift from traditional payment methods to instant digital transactions.
Read the original report — Moneycontrol
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