India Introduces 0.4% MDR on UPI Transactions

YourStory · startup

India will introduce a 0.4% Merchant Discount Rate (MDR) on UPI transactions exceeding Rs 2,000 made to merchants starting October 15, 2026. This marks the end of the zero-MDR regime for UPI, which aimed to boost digital payments. The government states that approximately 96% of merchant transactions are below Rs 2,000 and will remain unaffected. Person-to-person transfers and payments to small merchants are also exempt.