Positive impactEconomy
UPI payments above ₹2,000: Who will pay the 0.4% MDR? FM Sitharaman clarifies
Mint 1 hr ago·25 Sept 2026, 5:00 am
The finance ministry announced that from mid‑October 2026 a merchant discount rate of 0.4% will apply to UPI transactions that exceed ₹2,000. The charge will be levied on the merchant side rather than on the consumer.
For investors, the move adds a new cost line for businesses that rely heavily on high‑value UPI payments, such as e‑commerce platforms and digital wallets. Merchants may adjust pricing or seek to shift the expense to buyers, which could influence transaction volumes and margins for payment‑gateway firms.
Market participants will be watching how quickly merchants adopt the rule, whether any price changes appear on consumer receipts, and if the government tweaks the threshold or rate. Updates from the RBI or industry bodies could also shape the longer‑term impact on the payments ecosystem.
Excerpt from Mint
Finance Minister Nirmala Sitharaman has clarified that the new 0.4% MDR on specified UPI merchant payments above ₹ 2,000 will be charged to merchants, not customers, from 15 October 2026. The proposed Merchant Discount Rate (MDR) on certain UPI payments above ₹ 2,000 has raised concerns among users, merchants, and…Read the original at Mint
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