1 hr ago
Noida Businesses Split Over New UPI MDR Charges
A new fee is planned for some UPI payments made to shops.
It will start on October 15 and apply when a person pays a merchant more than Rs 2,000.
The fee will be 0.4% of the payment.
Shops, not customers, are supposed to pay it.
Some Noida shopkeepers say they will quietly cover the fee themselves.
Other sellers say their profits are already very small.
They may ask customers to pay with cash or remove some UPI QR codes.
Payments between people and most smaller shop purchases will still be free.
A 0.4% MDR will apply from October 15 to person-to-merchant UPI payments above Rs 2,000.
Merchants, not consumers, will pay the charge, which is capped at Rs 300 for transactions of Rs 75,000 or more.
Some Noida electronic-goods sellers say they will absorb the cost rather than pass it to customers.
Fish sellers and other vendors worry the charge could reduce already-thin profit margins and may request cash or remove QR codes.
Payments between individuals and most everyday merchant payments will remain free.
- Who
- Noida traders, shopkeepers, and other merchants, including electronic-goods and fish sellers.
- What
- A 0.4% merchant discount rate will begin applying to eligible person-to-merchant UPI payments above Rs 2,000.
- Where
- Businesses in Noida, including Sector 18 and Sector 31’s Nithari Market.
- When
- From October 15, 2026.
- Why
- The charge is intended to be paid by merchants and may affect their profit margins.
Absorb the Cost
Limit UPI Use
Whether to pass the fee to customers
Absorb the Cost
Electronic-goods sellers Harpreet Kohli and Harish Gupta say they will not pass the MDR cost to customers and will absorb it themselves.
Limit UPI Use
Some vendors say the cost could erode their thin margins, so they may request cash payments or stop accepting some UPI transactions above Rs 2,000.
Impact on small-margin businesses
Absorb the Cost
Some merchants consider the charge manageable, particularly where individual sales rarely exceed Rs 2,000.
Limit UPI Use
Fish sellers and some other traders say even a manageable charge could accumulate and reduce their profits.
Key facts
- MDR rate
- 0.4% on eligible person-to-merchant UPI payments
- Start date
- October 15, 2026
- Payment threshold
- Above Rs 2,000
- Maximum charge
- Rs 300 for transactions of Rs 75,000 or more
- Who pays
- Merchants, not consumers
- Noida response
- Some businesses will absorb the cost, while others may request cash or remove QR codes
- Unaffected payments
- Person-to-person payments and most everyday merchant payments remain free
Quotes
Harpreet Kohli
Owner of Kay Dee Electronics in Noida
“UPI was the game changer for us. Now, if UPI also comes under MDR, it will affect our profit margins. But we also have to contend with online giants competing with us, so we cannot pass the cost on to the customer. At most, we can ask customers to pay in cash. Otherwise, if they want to pay by UPI or any other mode, we will have to honour that.”
news18.com
“We will not pass it on to the customer. We will absorb it politely. Anyway, we had to incur a whole array of MDR charges but it is not fair to pass it on to the customer, since it is a merchant discount rate. It is something that we will bear.”
news18.com
Sources
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