UPI MDR Regime Explained: Here’s What Will Be Charged After Oct 15

UPI will introduce a 0.4% MDR on eligible P2M transactions above ₹2,000 from October 15.

The move shifts UPI towards a commercial model while keeping consumer payments and small merchants largely protected.

MDR rates vary by transaction value and sector, with separate rules for small merchants, capital markets and credit-linked UPI.

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India’s ubiquitous UPI payment system is set for a significant change from October 15, with the introduction of a merchant discount rate (MDR) on select transactions.

Under the new framework, merchants will be charged an MDR of 0.4% on person to merchant (P2M) UPI transactions above ₹2,000. The charge will be capped at ₹300 for transactions worth ₹75,000 or more.

The October 15 change does not necessarily make UPI a paid service for consumers. Instead, it introduces a commercial layer on the merchant side. With a 0.4% MDR for regular P2M transactions above ₹2,000 and a ₹300 cap for transactions of ₹75,000 and above.

The framework keeps P2P payments free,........

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