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UPI MDR: Will paying Rs 6,000 in Rs 2,000 installments avoid MDR?
- •Merchant Discount Rate (MDR) will be applicable on UPI payments from October 15.
- •MDR will only apply to UPI payments exceeding Rs 2,000.
- •Payments up to Rs 2,000 will have zero MDR.
- •NPCI announced MDR for person-to-merchant (P2M) UPI transactions.
- •Paying Rs 6,000 in three installments of Rs 2,000 each will incur no MDR.
Key Questions Answered
Starting October 15, an MDR of 0.4 percent will be applied to person-to-merchant UPI payments that exceed Rs 2,000. However, for payments of Rs 75,000 or more, the maximum MDR is capped at Rs 300, while transactions under Rs 2,000 have zero MDR.
No, if you split a Rs 6,000 payment into three separate installments of Rs 2,000 each, no MDR will be applied because each transaction technically remains at or below the zero-MDR threshold. In contrast, making a lump sum payment of Rs 6,000 would incur a 0.40 percent MDR fee of about Rs 24.
No, the National Payments Corporation of India has stated that MDR will not be applied to person-to-person money transfers. The MDR rule is specifically levied on person-to-merchant UPI transactions exceeding Rs 2,000.
