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Government Acts to Stop Merchants Passing UPI MDR Charges to Consumers
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News18•25-09-2026, 00:17
Government Acts to Stop Merchants Passing UPI MDR Charges to Consumers
- •The government is intensifying efforts to ensure Merchant Discount Rate (MDR) charges on eligible UPI merchant transactions are not transferred to consumers.
- •Banks have been instructed to prevent merchants from passing MDR costs to customers.
- •The current UPI framework keeps person-to-person payments free, with MDR applying only to specified merchant transactions exceeding ₹2,000.
- •The government states that approximately 96% of UPI merchant transactions will remain unaffected by MDR charges.
Key Questions Answered
No, all person-to-person UPI payments will continue to be completely free of charge for consumers, and they will not face any transaction fees or MDR costs.
The current UPI framework ensures that approximately 96% of UPI merchant transactions remain completely unaffected and free from charges.
The Lok Sabha passed the Taxation and Other Laws (Amendment) Bill, 2026, which amends the Payment and Settlement Systems Act, 2007.
