UPI MDR: Who decides ultimate implementation and enforcement of MDR caps? Any dedicated fund for small merchants?
Mint 1 hr ago·8 Oct 2026, 3:03 pm
The Reserve Bank of India (RBI) is actively evaluating the implementation of a 0.4% merchant discount rate (MDR) cap on UPI transactions exceeding ₹2,000. This policy aims to reduce costs for merchants, but the central bank is currently considering a significant delay. The proposed postponement would push the deadline to January 2027, giving payment companies and small merchants essential time to upgrade their systems and prepare for the new fee structure.
This development is significant for the broader market as it highlights the RBI's cautious approach to financial inclusion. By delaying the fee, the central bank seeks to avoid disrupting the digital payment ecosystem and ensure that small merchants are not burdened with unexpected costs. This move could stabilize the current growth of UPI usage and maintain the competitive balance among payment service providers.
Excerpt from Mint
India is considering delaying a 0.4% merchant discount rate on UPI transactions above ₹ 2,000 until January 2027. The postponement would give payment companies time to update systems and merchants time to prepare. Person-to-person payments and smaller merchant transactions would remain free. The government is…Read the original at Mint
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