Government weighs reinstating UPI MDR for large merchants at 5-7 basis points
New Delhi may reverse its 2020 zero-MDR policy, charging large merchants (turnover above ₹1-1.5 crore) 5-7 basis points on UPI payments over ₹2,000. Small merchants—90% of the base—stay exempt. Decision pending amid FY26 volumes of 242 billion transactions worth ₹314 lakh crore.
Government considering reinstating MDR on UPI transactions for large merchants (turnover above ₹1-1.5 crore, payments over ₹2,000) at 5-7 basis points, reversing 2020 zero-MDR policy. Small merchants remain exempt; final decision pending.
Why this matters
Follows earlier reports the Centre weighed a 0.5% MDR on UPI payments above ₹2,000 for large merchants. Comes as UPI erodes credit-card dominance and MeitY moves to govern agentic AI payments on UPI.
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