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RBI Governor Sanjay Malhotra Issues Major Statement on UPI MDR Ahead of October 15 Implementation
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CNBC Awaaz•07-10-2026, 12:54
RBI Governor Sanjay Malhotra Issues Major Statement on UPI MDR Ahead of October 15 Implementation
- •RBI Governor Sanjay Malhotra stated that the decision on UPI MDR has been finalized and does not expect any decline in transaction volumes.
- •The new Merchant Discount Rate applies to UPI transactions exceeding 2,000 rupees starting October 15, with a maximum limit of 300 rupees.
- •Peer-to-peer payments will remain completely free of charges regardless of the transaction amount.
- •MDR proceeds will be distributed among stakeholders with 40 percent to the customer bank, 30 percent to the payment gateway, 20 percent to the UPI app, and 10 percent to the sponsor bank.
- •UPI is now accepted internationally in 11 countries including recent addition Uzbekistan, and transactions have seen massive multifold growth over the past decade.
Key Questions Answered
Starting October 15, a new Merchant Discount Rate (MDR) comes into effect for UPI transactions exceeding 2,000 rupees, with a maximum limit of 300 rupees. However, peer-to-peer (P2P) payments will remain completely free regardless of the transaction amount.
Out of the total MDR collected from merchant transactions, 40 percent goes to the customer's bank, 30 percent to the payment gateway, 20 percent to the UPI app, and the remaining 10 percent goes to the sponsor bank of the UPI app.
UPI is now accepted internationally in 11 countries, with Uzbekistan being the newest addition to the list. Other countries supporting UPI include Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar, Sri Lanka, Cambodia, and Greece.
