- Big shock for UPI users after Diwali?
- Charges on payments above Rs 2000?
- What exactly is the proposal?
UPI Payment Charges Update : There is an important news for millions of people who make payments using UPI. After Diwali, there is talk of imposing the merchant discount rate MDR, i.e. transaction fee, on digital payments above ₹2,000. The National Payments Corporation of India is reported to have announced the possibility of implementing this system in November. NPCI had originally planned to implement it from October 15, but postponed it due to the festive season. Exactly what follows”text-align: justify;”> Trump Iran Conflict : Big movement in the crude oil market due to Trump's decision! Brent crude below $92
Earlier, in an official statement issued on October 13, NPCI had said that the charges on UPI payments will be implemented soon after Diwali. NPCI had said, “In view of the festive period, the merchant discount rate MDR on certain person-to-merchant P2M UPI transactions will be implemented shortly after Diwali. The date will be communicated separately.”
Who will be charged how much?
- For payments of ₹75,000 or more, the maximum MDR rate will be ₹300 per transaction.
A concessional MDR rate of 0.02% will be applicable for capital market transactions such as payments to mutual funds, securities, stockbrokers and dealers, subject to a ceiling of ₹300. - For certain merchant categories such as railways, telecom services, insurance and fuel, a discounted uniform MDR rate of ₹5 per transaction will be applicable on payments above ₹2,000 instead of the normal percentage-based rate.
- The proposed MDR rules will not apply to person-to-person UPI transfers. Personal payments, such as sending money to family members, sharing bills with friends or transferring money between accounts, will remain free as before.
96% of merchants are exempt from this new fee
According to the government, approximately 96% of merchant UPI transactions will be exempted from this new fee. Additionally, small businesses accepting UPI QR payments up to ₹1 lakh per month are exempted from MDR (Merchant Discount Rate).
Finance Minister Nirmala Sitharaman has clarified that consumers will not be charged MDR. Banks have also been instructed not to impose this fee on traders. However, traders have expressed concern that merchants may indirectly change prices or other features to compensate for increased costs.
What causes MDR?
The system is being implemented to cover the cost of running digital payment systems, cyber security, fraud prevention and strengthening the technical infrastructure. According to the government, running the UPI system costs approximately ₹20,000 crore annually.
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