NPCI announces MDR for UPI; merchant transactions above Rs 2,000 to attract 0.4% charge

The NPCI disclosed a revised MDR framework for Unified Payments Interface (UPI) that differentiates between small‑scale vendors and larger merchants. Under the new rules, participants classified as person‑to‑person merchants – typically shopkeepers, street vendors and local businesses receiving less than Rs 1 lakh per month via UPI – will enjoy a mandatory zero‑MDR.

For merchants outside the P2PM bracket, the NPCI stipulated that any UPI transaction exceeding Rs 2,000 will attract a 0.4% fee. The policy does not set a turnover‑based threshold for larger merchants, focusing instead on the transaction value to determine the charge. No specific geographic location was mentioned, and the announcement was made through NPCI’s official communication channels.

The move comes as UPI continues to dominate digital payments in India, with millions of small traders relying on the platform for daily sales. By eliminating fees for low‑turnover merchants, the NPCI aims to encourage broader adoption among informal sector participants, while the modest charge on higher‑value transactions seeks to sustain the ecosystem’s financial viability.