{"id":18875,"date":"2026-09-25T03:29:01","date_gmt":"2026-09-25T09:59:01","guid":{"rendered":"https:\/\/shoonya.com\/blog\/?p=18875"},"modified":"2026-09-25T03:29:02","modified_gmt":"2026-09-25T09:59:02","slug":"what-the-upi-mdr-structure-looks-like","status":"publish","type":"post","link":"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/","title":{"rendered":"UPI MDR: 96% of Merchant Transactions Unaffected, What Changes Above \u20b92,000"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\"><p class=\"ez-toc-title\" style=\"cursor:inherit\"><\/p>\n<\/div><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#What_the_MDR_Structure_Looks_Like\" >What the MDR Structure Looks Like<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#Does_the_Customer_Pay_MDR\" >Does the Customer Pay MDR?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#Where_Does_the_MDR_Money_Go\" >Where Does the MDR Money Go?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#How_MDR_Works_on_a_%E2%82%B95000_Transaction\" >How MDR Works on a \u20b95,000 Transaction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#Why_MDR_Is_Being_Introduced_Now\" >Why MDR Is Being Introduced Now<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#How_UPI_MDR_Compares_With_Card_Charges\" >How UPI MDR Compares With Card Charges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#How_Indias_UPI_MDR_Compares_Globally\" >How India&#8217;s UPI MDR Compares Globally?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/#Final_Outlook\" >Final Outlook<\/a><\/li><\/ul><\/nav><\/div>\n<nav style=\"--separator: &quot;\/&quot;\" class=\"wp-block-breadcrumbs\" aria-label=\"Breadcrumbs\"><ol><li><a href=\"https:\/\/shoonya.com\/blog\/\">Home<\/a><\/li><li><a href=\"https:\/\/shoonya.com\/blog\/latest-news\/\">News<\/a><\/li><li><span aria-current=\"page\">UPI MDR: 96% of Merchant Transactions Unaffected, What Changes Above \u20b92,000<\/span><\/li><\/ol><\/nav>\n\n\n<meta charset=\"UTF-8\">\n<meta name=\"viewport\" content=\"width=device-width, initial-scale=1.0\">\n<link rel=\"preconnect\" href=\"https:\/\/fonts.googleapis.com\">\n<link rel=\"preconnect\" href=\"https:\/\/fonts.gstatic.com\" crossorigin=\"\">\n<link href=\"https:\/\/fonts.googleapis.com\/css2?family=Figtree:wght@300;400;500;600;700;800&#038;family=Bricolage+Grotesque:wght@700;800&#038;display=swap\" rel=\"stylesheet\">\n<style>\n  :root{\n    --copper:#EFA145; --copper-deep:#D17800; --steel:#424242;\n    --forest:#082F25; --forest-2:#0C3D30; --fresh:#6CE890; --green:#45D965;\n    --mint:#EEFFF2; --mint-2:#F6FFF9; --line:#DDEBE3; --line-soft:#E8F3EC;\n    --red:#C11414; --ink:#2B342F; --grey:#5F6B65; --maxw:820px;\n  }\n  *{box-sizing:border-box;}\n  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var(--line);border-radius:14px;font-size:14px;line-height:1.6;color:var(--grey);}\n  .disclaimer strong{color:var(--steel);}\n  .source{margin:30px 0 0;padding-top:18px;border-top:1px solid var(--line);font-size:14px;color:var(--grey);word-break:break-word;}\n  .source a{color:var(--copper-deep);}\n  .faq{display:flex;flex-direction:column;gap:12px;margin:6px 0 22px;}\n  .faq-item{background:var(--mint-2);border:1px solid var(--line);border-radius:14px;overflow:hidden;transition:border-color .2s ease, box-shadow .2s ease;}\n  .faq-item:hover{border-color:var(--copper);box-shadow:0 2px 10px rgba(239,161,69,0.18);}\n  .faq-item[open]{border-color:var(--copper);box-shadow:0 2px 10px rgba(239,161,69,0.18);}\n  .faq-q{list-style:none;cursor:pointer;display:flex;align-items:center;justify-content:space-between;gap:16px;padding:17px 20px;font-weight:700;color:var(--forest);font-size:16px;}\n  .faq-q::-webkit-details-marker{display:none;}\n  .faq-icon{flex:0 0 auto;width:26px;height:26px;border-radius:50%;background:var(--copper);color:#fff;display:flex;align-items:center;justify-content:center;font-size:16px;font-weight:800;line-height:1;transition:transform .2s ease, background .2s ease;}\n  .faq-item[open] .faq-icon{background:var(--forest);transform:rotate(45deg);}\n  .faq-a{margin:0;padding:0 20px 18px;color:#33413B;font-size:15.5px;line-height:1.6;}\n  .video-wrap{position:relative;padding-bottom:56.25%;height:0;overflow:hidden;border-radius:14px;margin:6px 0 22px;border:1px solid var(--line);}\n  .video-wrap iframe{position:absolute;top:0;left:0;width:100%;height:100%;border:0;}\n  @media (max-width:640px){ body{font-size:16.5px;} .masthead{padding:32px 24px 28px;} .body{padding:28px 24px 34px;} h2{margin-top:36px;} table{font-size:14px;} }\n  .entry-title,.post-title,.single-post h1,h1.entry-title{color:#000!important;}\n<\/style>\n\n<div class=\"body\">\n  <p>Around 96% of UPI merchant transactions will remain unaffected by the introduction of the Merchant Discount Rate, with the charge applying only to specified person-to-merchant transactions above \u20b92,000.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"What_the_MDR_Structure_Looks_Like\"><\/span>What the MDR Structure Looks Like<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>The normal MDR for eligible transactions above \u20b92,000 is 0.4%, with a maximum charge of \u20b9300 for transactions of \u20b975,000 and above, according to NPCI. Essential sectors including railways, telecom, insurance, fuel, and agricultural inputs will attract a flat \u20b95 MDR above \u20b92,000.<\/p>\n  <div class=\"tbl-scroll\">\n    <table>\n      <thead>\n        <tr>\n          <th>Transaction Type<\/th>\n          <th>MDR Treatment<\/th>\n        <\/tr>\n      <\/thead>\n      <tbody>\n        <tr><td>P2P payments, any amount<\/td><td>Zero MDR<\/td><\/tr>\n        <tr><td>P2M payments up to \u20b92,000<\/td><td>Zero MDR<\/td><\/tr>\n        <tr><td>Small merchants receiving up to \u20b91 lakh a month via UPI QR<\/td><td>Zero MDR<\/td><\/tr>\n        <tr><td>RuPay debit-card transactions<\/td><td>Zero MDR<\/td><\/tr>\n        <tr><td>P2M payments above \u20b92,000 (eligible transactions)<\/td><td>0.4%, capped at \u20b9300<\/td><\/tr>\n        <tr><td>Railways, telecom, insurance, fuel, agri inputs above \u20b92,000<\/td><td>Flat \u20b95<\/td><\/tr>\n      <\/tbody>\n    <\/table>\n  <\/div>\n  <p>Sources said 96% of all UPI merchant transactions fall below \u20b92,000 and will carry zero MDR.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"Does_the_Customer_Pay_MDR\"><\/span>Does the Customer Pay MDR?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <div class=\"quote\">\n    <p>The customer does NOT pay MDR.<\/p>\n  <\/div>\n  <p>Banks have been advised to ensure merchants do not pass the charge on to customers. MDR is a merchant-side cost, not a consumer levy.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"Where_Does_the_MDR_Money_Go\"><\/span>Where Does the MDR Money Go?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>For eligible UPI merchant transactions, the MDR is divided among participants in the payment ecosystem. The government share is zero.<\/p>\n  <div class=\"tbl-scroll\">\n    <table>\n      <thead>\n        <tr>\n          <th>Recipient<\/th>\n          <th>Share of MDR<\/th>\n        <\/tr>\n      <\/thead>\n      <tbody>\n        <tr><td>Issuing bank (customer&#8217;s bank)<\/td><td><span class=\"num\">40%<\/span><\/td><\/tr>\n        <tr><td>Merchant acquirer<\/td><td><span class=\"num\">30%<\/span><\/td><\/tr>\n        <tr><td>UPI app or TPAP<\/td><td><span class=\"num\">20%<\/span><\/td><\/tr>\n        <tr><td>Payer PSP bank<\/td><td><span class=\"num\">10%<\/span><\/td><\/tr>\n        <tr><td>Government of India<\/td><td><span class=\"num\">0%<\/span><\/td><\/tr>\n      <\/tbody>\n    <\/table>\n  <\/div>\n\n  <h2><span class=\"ez-toc-section\" id=\"How_MDR_Works_on_a_%E2%82%B95000_Transaction\"><\/span>How MDR Works on a \u20b95,000 Transaction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>For a \u20b95,000 eligible UPI merchant transaction, a 0.4% MDR works out to \u20b920 for the merchant. By comparison, a credit-card transaction carrying a 2% MDR on the same amount would come to \u20b9100.<\/p>\n  <p>The product price does not change with the payment method: the Same MRP, Any Mode principle. Merchants have historically absorbed debit-card MDR within the same MRP.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"Why_MDR_Is_Being_Introduced_Now\"><\/span>Why MDR Is Being Introduced Now<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>The stated objective is to create a sustainable revenue model for UPI as its scale and infrastructure requirements grow. The move is intended to make India&#8217;s UPI ecosystem financially sustainable over the long term and to fund servers, payment infrastructure, cybersecurity, fraud prevention, and customer support.<\/p>\n  <p>It also aims to expand UPI deeper into rural and semi-urban India and develop products such as Credit on UPI, UPI 123Pay, and other payment services. India had 55.49 crore UPI users as of June 2026.<\/p>\n  <p>The decision followed deliberations in the UPI and Services Steering Committee, which includes banks and other stakeholders. Sources also pointed to the Parliamentary Standing Committee on Finance&#8217;s March 2026 report, which called for a viable revenue mechanism to ensure UPI&#8217;s long-term financial sustainability. Opposition party MPs were present, according to the material shared.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"How_UPI_MDR_Compares_With_Card_Charges\"><\/span>How UPI MDR Compares With Card Charges<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>MDR is not unique to UPI. Merchant payment charges already exist across credit cards, Visa and Mastercard debit cards, and payment systems globally.<\/p>\n  <div class=\"tbl-scroll\">\n    <table>\n      <thead>\n        <tr>\n          <th>Payment Method<\/th>\n          <th>MDR Rate<\/th>\n        <\/tr>\n      <\/thead>\n      <tbody>\n        <tr><td>UPI P2M above \u20b92,000<\/td><td>0.4%, capped at \u20b9300<\/td><\/tr>\n        <tr><td>Credit cards<\/td><td>1.5-3%, uncapped by RBI<\/td><\/tr>\n        <tr><td>Debit cards at physical POS (small merchants)<\/td><td>0.40%<\/td><\/tr>\n        <tr><td>Debit cards via QR (small merchants)<\/td><td>0.30%<\/td><\/tr>\n        <tr><td>Debit cards at physical POS (other merchants)<\/td><td>0.90%<\/td><\/tr>\n        <tr><td>Debit cards via QR (other merchants)<\/td><td>0.80%<\/td><\/tr>\n        <tr><td>RuPay debit cards<\/td><td>Zero<\/td><\/tr>\n      <\/tbody>\n    <\/table>\n  <\/div>\n  <p>For credit cards, MDR is typically 1.5 to 3% of the transaction value and is not capped by RBI; the rate is determined through market contracts between merchants and acquiring banks.<\/p>\n\n  <h2><span class=\"ez-toc-section\" id=\"How_Indias_UPI_MDR_Compares_Globally\"><\/span>How India&#8217;s UPI MDR Compares Globally?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <p>Merchant fees on instant digital payments are common globally. India&#8217;s 0.4% rate is among the lower end of global benchmarks:<\/p>\n  <div class=\"tbl-scroll\">\n    <table>\n      <thead>\n        <tr>\n          <th>Country<\/th>\n          <th>System<\/th>\n          <th>MDR Range<\/th>\n        <\/tr>\n      <\/thead>\n      <tbody>\n        <tr><td>Switzerland<\/td><td>TWINT<\/td><td>1.3%<\/td><\/tr>\n        <tr><td>Thailand<\/td><td>PromptPay<\/td><td>1.5-1.8%<\/td><\/tr>\n        <tr><td>Poland<\/td><td>BLIK<\/td><td>0.7-1.4%<\/td><\/tr>\n        <tr><td>Philippines<\/td><td>QR Ph<\/td><td>~1.0%<\/td><\/tr>\n        <tr><td>Spain<\/td><td>Bizum<\/td><td>0.4-0.9%<\/td><\/tr>\n        <tr><td>Singapore<\/td><td>PayNow<\/td><td>0.4-0.65%<\/td><\/tr>\n        <tr><td>China<\/td><td>WeChat Pay \/ Alipay<\/td><td>0.38-0.60%<\/td><\/tr>\n        <tr><td>Indonesia<\/td><td>QRIS<\/td><td>0.3-0.7%<\/td><\/tr>\n        <tr><td>Brazil<\/td><td>Pix<\/td><td>~0.30-0.35%<\/td><\/tr>\n        <tr><td>Malaysia<\/td><td>DuitNow QR<\/td><td>~0.25%<\/td><\/tr>\n        <tr class=\"total\"><td>India<\/td><td>UPI<\/td><td><span class=\"num\">0.4%, capped at \u20b9300<\/span><\/td><\/tr>\n      <\/tbody>\n    <\/table>\n  <\/div>\n\n  <h2><span class=\"ez-toc-section\" id=\"Final_Outlook\"><\/span>Final Outlook<span class=\"ez-toc-section-end\"><\/span><\/h2>\n  <div class=\"outlook\">\n    <p>The UPI MDR framework keeps most transactions at zero cost while introducing a modest charge on higher-value merchant payments to fund infrastructure sustainability. How merchants, payment apps, and banks adapt to the new structure, and whether the charge remains fully absorbed within the ecosystem without passing through to consumers, will be the key developments to watch after the October 15 rollout.<\/p>\n  <\/div>\n\n  <p class=\"source\">\n    <strong>Source:<\/strong>\n    Moneycontrol\n  <\/p>\n\n  <div class=\"disclaimer\">\n    <strong>Disclaimer:<\/strong> This content is for education and awareness purpose only and should not be considered investment advice or a recommendation. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.\n  <\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Around 96% of UPI merchant transactions will remain unaffected by the introduction of the Merchant Discount Rate, with the charge applying only to specified person-to-merchant transactions above \u20b92,000. What the MDR Structure Looks Like The normal MDR for eligible transactions above \u20b92,000 is 0.4%, with a maximum charge of \u20b9300 for transactions of \u20b975,000 and &hellip; <a href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;UPI MDR: 96% of Merchant Transactions Unaffected, What Changes Above \u20b92,000&#8221;<\/span><\/a><\/p>\n","protected":false},"author":17,"featured_media":18881,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[1082],"tags":[10664,10663,10587,10662,10660,10661,10659],"class_list":["post-18875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news","tag-merchant-discount-rate","tag-p2m-transactions","tag-upi-mdr","tag-upi-mdr-charges","tag-upi-merchant-transactions","tag-upi-transaction-charges","tag-what-the-mdr-structure-looks-like"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UPI MDR: 96% of Merchant Transactions Stay Unaffected<\/title>\n<meta name=\"description\" content=\"UPI MDR applies only to P2M transactions above \u20b92,000 at 0.4%, capped at \u20b9300. 96% of merchant transactions remain at zero MDR.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPI MDR: 96% of Merchant Transactions Stay Unaffected\" \/>\n<meta property=\"og:description\" content=\"UPI MDR applies only to P2M transactions above \u20b92,000 at 0.4%, capped at \u20b9300. 96% of merchant transactions remain at zero MDR.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/shoonya.com\/blog\/what-the-upi-mdr-structure-looks-like\/\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ShoonyaApp\/\" \/>\n<meta property=\"article:published_time\" content=\"2026-09-25T09:59:01+00:00\" \/>\n<meta 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