NPCI to Implement 0.4% MDR on P2M UPI Transactions Over ₹2,000
India's National Payments Corporation (NPCI) has established a 0.4% Merchant Discount Rate (MDR) for person-to-merchant (P2M) UPI transactions exceeding ₹2,000. The new charges will take effect on October 15.
The National Payments Corporation of India (NPCI) has finalized its framework for Merchant Discount Rate (MDR) fees on specific high-value UPI transactions. Effective October 15, person-to-merchant (P2M) transactions above ₹2,000 will incur a 0.4% MDR.
The MDR will be capped at ₹300 for payments of ₹75,000 and above. Peer-to-peer (P2P) transactions will remain free of charge. The Ministry of Finance stated the framework aims to protect individuals and small businesses while introducing a limited charge on larger merchant transactions.
Approximately 96% of merchant transactions are expected to remain unaffected, as they are either below the ₹2,000 threshold or fall under the zero-MDR category for small merchants receiving up to ₹1 Lakh per month via UPI QR codes.
Specific sectors, including railways, telecom, insurance, and fuel, will operate under a flat fee of ₹5 for payments over ₹2,000. Capital market transactions will see a 0.02% MDR, capped at ₹300, to encourage participation in the financial markets ecosystem.