Neutral impactEconomy
NPCI releases MDR framework for UPI transactions — Here's what changes for merchant payments
Mint 1 hr ago·15 Sept 2026, 3:53 pm
The National Payments Corporation of India (NPCI) has introduced a new framework for Merchant Discount Rate (MDR), the fee merchants pay to accept digital payments. The key update is that UPI transactions will now be free for all person-to-person payments and for merchant payments up to ₹2,000. For small merchants, the fee will be capped at 0.25% for transactions below ₹2,000 and 2% for larger amounts.
This move is significant because it reduces the cost burden on merchants, particularly small businesses, to encourage the continued use of UPI. By keeping a major digital payment option free, the central bank aims to sustain the growth of digital transactions and promote financial inclusion across the country.
Investors should monitor how this policy impacts the overall volume of digital transactions. A sustained increase in transaction volume could benefit the broader digital payments ecosystem, while the zero-fee structure may pressure the profitability of some payment processing companies in the long run.
Excerpt from Mint
UPI will remain free for all person-to-person transactions, merchant payments up to ₹ 2,000, and for small merchants, as per the NPCI's MDR framework. The organisation said it aims to promote digital payments and ensure UPI's sustainability. The National Payments Corporation of India (NPCI) today announced merchant…Read the original at Mint
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update worth tracking. Use the price and stock snapshot to gauge how the market is responding.
