UPI Payments: New MDR Rules for Large Merchants from October 15

New regulations regarding Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions are set to take effect from October 15. These changes will specifically impact certain UPI payments exceeding ₹2,000 when made to large merchants.

Under the new framework, customers using UPI for transactions will continue to face no charges. Similarly, eligible small vendors will also remain exempt from any MDR fees on UPI payments they receive. The application of MDR is targeted at larger merchants for higher-value transactions, aiming to streamline the economic model of digital payments while protecting smaller businesses and consumers.

For businesses, particularly large merchants, understanding these new rules is crucial for financial planning and operational adjustments. It necessitates a review of their payment acceptance strategies and potential cost implications for transactions over the specified threshold. For customers, the continued absence of direct fees ensures that UPI remains a cost-effective and convenient payment method for daily use.

What to watch: The practical implementation of these new MDR rules and their impact on transaction volumes.

Editor's note: Consistent with source; no unsupported details added.

This article is AI-generated and fact-gated. Original reporting: Business Standard