India proposes ending zero-MDR rule for UPI, raising a potential cost for large merchants
The Finance Ministry has proposed removing the zero-MDR mandate on UPI and RuPay debit-card payments. Consumers are expected to remain fee-free, but merchant charges, rates and covered transaction categories would be notified only after the amendment is passed.
Finance Ministry has proposed removing the zero-MDR mandate for UPI, potentially shifting payment-processing costs to merchants while keeping consumers fee-free. The move aims to fund UPI expansion and could materially affect large Indian retailers' digital-payment acceptance costs.
Why this matters
The proposal follows a recent government move to enable MDR on UPI and RuPay debit payments for large merchants, while UPI continues to post record transaction values and daily volumes.
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