NPCI Imposes 0.4% MDR on UPI P2M Transactions Above Rs 2,000 from Oct 15, 2026

Government Imposes 0.4% MDR on UPI Transactions Over ₹2,000 from October 15

The government has firmly ruled out any rollback of the 0.4% Merchant Discount Rate (MDR) on UPI transactions above ₹2,000, effective October 15, 2026. This marks the end of the zero-MDR regime for merchant payments, aiming to make the UPI ecosystem self-sustainable while keeping person-to-person and small payments free.

Taxation Bill 2026 Allows MDR on UPI & RuPay; 23.6 Bn UPI Transactions in July

The Taxation and Other Laws (Amendment) Bill, 2026, passed in Lok Sabha, paves the way for reintroducing MDR on UPI and RuPay debit card transactions. This shifts India's digital payments policy from zero-MDR to a sustainable fee model, impacting 23.6 billion monthly UPI transactions and the largely duopolistic market of PhonePe and Google Pay.

NPCI Allows 0.4% MDR on UPI Payments Above ₹2,000 from October 15, 2026

NPCI has announced a new MDR (Merchant Discount Rate) structure for UPI payments effective October 15, 2026. Mid-to-large merchants receiving payments above ₹2,000 per transaction will be charged 0.4% MDR, while over 97% of UPI transactions by volume remain free. This marks a major shift in India's digital payments ecosystem and has significant implications for banks, payment apps, and merchants.

Taxation and Other Laws (Amendment) Bill 2026 Allows MDR on UPI: Subsidy Falls to ₹2,000 Cr in FY27

UPI, currently free for users, may become chargeable after the government introduced the Taxation and Other Laws (Amendment) Bill, 2026. The Bill allows the government to notify transactions that can attract Merchant Discount Rate (MDR), potentially ending the zero-MDR regime. For students, this is a key economy/polity topic linking digital payments, financial inclusion, and fiscal policy.

Govt Proposes 0.25-0.5% MDR on UPI Transactions Above ₹2,000 via PSS Act Amendment

The government has proposed allowing a Merchant Discount Rate (MDR) of 0.25-0.5% on UPI transactions above ₹2,000 via an amendment to Section 10A of the Payment and Settlement Systems Act, 2007. This reverses a decade-long zero-MDR policy, potentially undermining financial inclusion, formalisation, and investment in UPI infrastructure. While only 5% of transactions by volume are affected, they account for 65% of transaction value, making this a significant policy shift.

Govt Allows MDR on UPI Transactions Above Rs 2,000; Paves Way for Charges on P2M Payments

The government has notified that UPI transactions above Rs 2,000 are no longer exempt from fees, creating legal room to impose Merchant Discount Rate (MDR) on high-value person-to-merchant payments. This shift aims to make the UPI ecosystem financially sustainable, but could affect 66% of UPI transaction value and alter consumer payment behavior.

Lok Sabha Passes Bill to End Zero MDR Guarantee for UPI; Govt Can Now Notify Charges on Merchants

The Taxation and Other Laws (Amendment) Bill, 2026, passed without debate, removes the statutory zero-MDR guarantee for UPI, allowing the government to impose charges on merchants. This affects 55 crore users and the digital payments ecosystem. The Bill also provides 15-year tax exemptions for foreign electronics manufacturers and simplifies rules for fund managers, raising concerns about asymmetry between domestic and foreign stakeholders.

RBI Introduces 0.4% MDR on UPI Transactions Above ₹2,000 for Merchants from Oct 15, 2026

Ending nearly six years of zero-MDR UPI, the government introduces a 0.4% fee on merchant transactions above ₹2,000 from October 15, 2026. This shift aims to ensure long-term sustainability of India's digital payments ecosystem. Importantly, all person-to-person (P2P) and small merchant payments (below ₹2,000) remain free for users.