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UPI MDR Fee: Small Merchants, Gig Workers Face 0.4% Levy from Oct 15
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CNBC TV18•29-09-2026, 21:50
UPI MDR Fee: Small Merchants, Gig Workers Face 0.4% Levy from Oct 15
- •From October 15, P2M UPI transactions above ’2,000 will incur a 0.4% Merchant Discount Rate (MDR).
- •Transactions between ’2,000 and ’75,000 are chargeable, with a cap of ’300 for transactions above ’75,000.
- •Small merchants and gig workers are concerned about the impact of MDR, especially those with thin margins or concentrated transactions in the affected range.
- •Industry bodies like AIMRA are protesting the levy, warning of potential store closures and planning a nationwide strike.
- •Experts note the impact is concentrated on mid-sized, thin-margin businesses, while the government links MDR to formalizing informal businesses.
Key Questions Answered
Starting October 15, person-to-merchant UPI transactions between ₹2,000 and ₹75,000 will attract a 0.4% merchant discount rate, while transactions above ₹75,000 have MDR capped at ₹300. This levy applies once monthly UPI receipts cross ₹1 lakh for three consecutive months.
No, everyday consumers will not face any charges or extra fees when making UPI payments or scanning QR codes at merchant locations.
Trade bodies like AIMRA have urged the government to exempt small and medium mobile retailers from the MDR, warning that it causes direct monthly losses and could lead to store closures.
