A revised Merchant Discount Rate (MDR) framework for select UPI merchant payments above 2,000 rupees will come into effect from October 15. All transactions up to 2,000 rupees and peer-to-peer transfers will remain free. For payments above 2,000 rupees, merchants in sectors such as railways and fuel will pay a flat fee of five rupees, while other merchant transactions will attract a 0.4 per cent charge capped at 300 rupees. While consumers will not face direct charges, questions remain over whether merchants will absorb costs or pass them on. The government will also create a dedicated fund to upgrade digital payment infrastructure for small vendors.
