New Delhi, September 15: UPI payments above ₹2,000 made to merchants will attract a 0.4% Merchant Discount Rate (MDR), according to detailed guidelines issued by the National Payments Corporation of India (NPCI) on Tuesday. The new rules come after the Centre on September 14 notified that UPI transactions of up to ₹2,000 will continue to attract zero MDR.
The charges will apply only to person-to-merchant (P2M) transactions above ₹2,000. Person-to-person (P2P) UPI transactions will remain free, irrespective of the transaction amount. For merchant transactions of ₹75,000 and above, the MDR will be capped at ₹300 per transaction.
However, certain essential sectors, including railways, telecom, insurance and fuel, will attract a flat MDR of ₹5 per transaction for payments above ₹2,000. Payments involving mutual funds, securities, stock brokers and dealers will have a lower MDR of 0.02%, capped at ₹300 per transaction.
In a relief for small vendors, UPI QR code transactions of up to ₹1 lakh a month under the Person-to-Person-Merchant (P2PM) category will continue to attract zero MDR on all transactions. According to the notification, the provision is aimed at connecting informal street vendors with formal merchant acquiring accounts and promoting digital payments in the unorganised sector.
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