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India to implement UPI Merchant Discount Rate on transactions above Rs 2,000
Starting October 15, the National Payments Corporation of India (NPCI) will implement a Merchant Discount Rate (MDR) on specific Unified Payments Interface (UPI) transactions exceeding Rs 2,000. The standard fee is set at 0.4%, with a maximum cap of Rs 300 for transactions of Rs 75,000 and above. Certain sectors, such as fuel, telecom, and insurance, will face a flat Rs 5 fee for transactions over Rs 2,000.
Finance Minister Nirmala Sitharaman clarified that the MDR is not a tax, cess, or surcharge, and the revenue will remain within the digital payments ecosystem rather than going to the government. The collected fees will be shared among the customer's bank (40%), the payment gateway (30%), the UPI application provider (20%), and the sponsoring bank (10%).
NPCI Managing Director Dilip Asbe noted that the policy is expected to have minimal impact on the majority of merchants, as approximately 75% of UPI merchants have not recorded a single transaction above Rs 2,000. Additionally, merchants with monthly UPI receipts under Rs 1 lakh are exempt from the charge. While trade organizations like the Confederation of All India Traders (CAIT) have expressed concerns regarding the burden on low-margin businesses, the government has stated it will work with banks and associations to ensure costs are not passed on to consumers.
Entities
Confederation of All India Traders · Dilip Asbe · India · National Payments Corporation of India · Nirmala Sitharaman · State Bank of India · Unified Payments Interface
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 2 SOURCES] The MDR revenue is distributed among the customer's bank (40%), the payment gateway (30%), the UPI app (20%), and the sponsoring bank (10%). www.thecore.in · theshillongtimes.com
- [● 3 SOURCES] A flat fee of Rs 5 will be applied to petrol and diesel purchases above Rs 2,000. www.thecore.in · www.thefinancialworld.com
- [● 2 SOURCES] The proposed MDR is not a tax, cess, or surcharge, and the funds will not go to the Consolidated Fund of India. theshillongtimes.com · www.news18.com
- [● 2 SOURCES] Merchants with monthly UPI receipts of up to Rs 1 lakh are exempt from paying the MDR. www.thecore.in · www.thefinancialworld.com
- [● 3 SOURCES] The MDR fee is capped at Rs 300 for transactions of Rs 75,000 and above. www.thecore.in · news.abplive.com · newsmeter.in
- [● 4 SOURCES] A 0.4% Merchant Discount Rate (MDR) will apply to specified person-to-merchant UPI transactions above Rs 2,000 starting October 15. www.thecore.in · news.abplive.com · newsmeter.in · theshillongtimes.com
- [● 3 SOURCES] Approximately 75% of UPI merchants have never recorded a single transaction above Rs 2,000. hindi.business-standard.com · samacharnama.com · www.dtnext.in
- [● 4 SOURCES] UPI transactions up to Rs 2,000 and person-to-person transfers will remain free of MDR. www.thefinancialworld.com · hindi.business-standard.com · newsmeter.in · theshillongtimes.com