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UPI MDR: Can Splitting a 10,000 Bill into Five 2000 Payments Avoid MDR?
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News18•25-09-2026, 16:30
UPI MDR: Can Splitting a 10,000 Bill into Five 2000 Payments Avoid MDR?
- •From October 15, a 0.4% MDR will apply to some P2M UPI payments exceeding 2000.
- •MDR is the fee a shopkeeper pays to the bank or payment company for accepting digital payments.
- •MDR will not be applicable to P2M payments up to 2000 and normal P2P UPI transfers.
- •Splitting a 10,000 bill into five separate 2000 payments means each transaction stays within the 2000 limit, potentially avoiding MDR.
- •Continuously making many similar small payments in an unusual pattern could lead to scrutiny by bank security systems, though UPI won't be blocked.
Key Questions Answered
MDR is the fee merchants pay to banks or payment systems for accepting digital transactions. Starting October 15, a 0.4% MDR applies to P2M UPI payments exceeding 2,000, while transactions up to 2,000 are completely exempt.
Yes, because MDR is calculated per separate transaction, making individual payments of 2,000 keeps each within the limit and avoids the fee. However, splitting bills is not a legal right, and shopkeepers can refuse multiple entries.
Yes, continuously making many similar small payments in a short period can trigger bank security systems designed to prevent fraud, potentially leading to extra verification or scrutiny.
