UPI MDR: Which 5 categories will attract flat Rs 5 fee above Rs 2000?
UPI MDR: Which 5 categories will attract flat Rs 5 fee above Rs 2000?
The MDR will apply within the merchant payment ecosystem and will be shared among payment ecosystem participants, including banks, payment service providers and UPI application providers.
₹5 MDR for UPI transactions > ₹2K in specific sectors.
Person-to-person UPI payments remain free.
Customers will not pay the new MDR charges.
The government has clarified which UPI merchant transactions will attract a flat ₹5 Merchant Discount Rate (MDR) under the new framework, while reiterating that person-to-person UPI payments will continue to remain free.
🎓 Explore Jobs by Qualification
Explore the latest job opportunities in J&K and across India based on your educational qualification.
Under the framework, UPI transactions above ₹2,000 in certain essential and thin-margin sectors will attract a flat MDR of ₹5 per transaction. The categories include railways, telecommunications, insurance, fuel and agricultural inputs.
The flat MDR is intended to provide cost certainty for critical public services and businesses operating on narrow margins, according to the government.
Which categories will attract ₹5 flat MDR?
The following sectors will attract a flat ₹5 MDR on UPI merchant transactions above ₹2,000:
Railways
Telecommunications
India, China start discussions on trade concerns; expected to hold more meetings going forward
Insurance
Fuel
Agricultural inputs The MDR will apply within the merchant payment ecosystem and will be shared among payment ecosystem participants, including banks, payment service providers and UPI application providers.
Will customers have to pay the ₹5 fee?
No. The government said MDR is not a charge imposed on customers making UPI payments. Banks have been advised to ensure that merchants do not pass the MDR cost on to customers.
UPI application providers have also been prohibited from imposing platform fees or hidden charges, according to the framework.
What about other UPI merchant payments?
For other person-to-merchant transactions above ₹2,000, a nominal MDR of 0.4% will apply. For transactions of ₹75,000 and above, the MDR will be capped at ₹300 per transaction.
Payments to merchants up to ₹2,000 will continue to remain free of MDR. Small merchants receiving up to ₹1 lakh per month through UPI QR codes under the Person-to-Person-Merchant category will also continue to get zero MDR on all transactions.
The government said approximately 96% of merchant transactions will remain unaffected, with MDR expected to apply to around 4% of merchant transactions.
All person-to-person UPI transactions will continue to remain completely free, irrespective of the amount transferred. The government also clarified that there will be no monthly quotas, volume restrictions or tiered caps on free UPI transactions.