{"id":124707,"date":"2026-09-16T11:32:49","date_gmt":"2026-09-16T06:02:49","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=124707"},"modified":"2026-09-16T11:39:12","modified_gmt":"2026-09-16T06:09:12","slug":"upi-mdr-2026","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/upi-mdr-2026\/","title":{"rendered":"UPI Merchant Charges Above \u20b92,000, New MDR Rules from 15th October"},"content":{"rendered":"

National Payments Corporation of India (NPCI)<\/b> has introduced a new <\/span>Merchant Discount Rate (MDR)<\/b> framework for selected <\/span>UPI person-to-merchant (P2M) transactions<\/b>. From <\/span>October 15, 2026<\/b>, a <\/span>0.4% MDR<\/b> will apply to eligible UPI merchant transactions above <\/span>\u20b92,000<\/b>. The new framework is aimed at supporting the long-term sustainability, infrastructure and security of the digital payments ecosystem.<\/span><\/p>\n

What is UPI MDR?<\/b><\/h2>\n

Merchant Discount Rate (MDR)<\/b> is a fee associated with accepting digital payments. It is generally paid within the payment ecosystem by the <\/span>merchant side<\/b> and is distributed among participating entities such as banks, payment service providers and payment application providers.<\/span><\/p>\n

In the case of UPI, MDR is being introduced for a specified category of <\/span>person-to-merchant transactions above \u20b92,000<\/b>. It is important to note that MDR is <\/span>not a tax collected by the government<\/b>. The revenue remains within the payment ecosystem to support its functioning and expansion.<\/span><\/p>\n

Why has NPCI Introduced MDR on UPI Transactions?<\/b><\/h2>\n

UPI has grown into a large-scale digital payment infrastructure handling billions of transactions every month. With the expansion of the network, payment infrastructure requires continued investment in <\/span>technology, cybersecurity<\/a>, fraud prevention, server capacity and customer support<\/b>.<\/span><\/p>\n

The new MDR framework provides a revenue mechanism within the payment ecosystem while keeping everyday low-value transactions free. NPCI and the government have also emphasised the need to protect <\/span>small merchants and ordinary users<\/b> from additional costs.<\/span><\/p>\n

Major reasons behind the introduction of MDR<\/b><\/h3>\n