1 hr ago
UPI Expansion Raises Questions Over Global MDR Charges
UPI is an Indian digital payment system that now works in 11 other countries.
Greece and the Maldives are the newest countries to accept it.
India plans to begin charging some merchants a fee called MDR from October 15, 2026.
A report says these charges may also apply in the other countries where UPI works.
However, the government has not clearly confirmed this in its official FAQ.
People sending money to other people will still not have to pay a UPI fee.
Some small merchants, such as street vendors, will also continue to pay no MDR.
Banks must make sure merchants do not add this fee to customers’ bills.
UPI is now accepted in 11 countries besides India, with Greece and the Maldives the latest additions.
Moneycontrol reported that the planned UPI MDR framework will apply across all 11 countries where UPI operates.
The government’s FAQ does not explicitly confirm that MDR will extend internationally, and official confirmation is pending.
From October 15, 2026, a 0.4% MDR will apply to specified Indian merchant transactions above ₹2,000, subject to caps and sector-specific rules.
Person-to-person payments and qualifying small-merchant transactions will remain free, while merchants cannot pass MDR charges to customers.
- Who
- The National Payments Corporation of India, the Indian government, merchants and UPI users are involved.
- What
- India is preparing new merchant discount rate charges for selected UPI transactions, with uncertainty over whether they will apply internationally.
- Where
- UPI is accepted in Cambodia, Bhutan, Nepal, Singapore, the United Arab Emirates, France, Sri Lanka, Mauritius, Qatar, Greece and the Maldives, in addition to India.
- When
- The new Indian MDR framework is scheduled to begin on October 15, 2026; Greece and the Maldives were recently added to UPI’s international network.
- Why
- The MDR framework is intended to charge specified merchant transactions while keeping person-to-person payments free.
Reported Finance Ministry Position
Officially Confirmed Position
Whether MDR applies globally
Reported Finance Ministry Position
Moneycontrol, citing Finance Ministry sources, reported that the new MDR framework will apply in all 11 countries where UPI currently operates.
Officially Confirmed Position
The government’s FAQ does not explicitly state that MDR will apply internationally, and official confirmation of the reported position is still awaited.
Key facts
- International reach
- UPI is accepted in 11 countries outside India.
- Latest additions
- Greece and the Maldives are the latest countries to adopt UPI.
- Indian MDR start date
- October 15, 2026.
- Standard merchant MDR
- 0.4% on specified merchant transactions above ₹2,000.
- Standard MDR cap
- ₹300 per transaction for transactions of ₹75,000 and above.
- Capital-market MDR
- 0.02%, capped at ₹300, for specified capital-market-related UPI payments.
- Consumer protection
- Person-to-person payments remain free, and merchants cannot pass MDR charges on to customers.
Quotes
The government
The Indian government, describing protections for small merchants under the MDR framework
“This provision will protect street vendors, neighborhood shops and other small businesses from additional payment costs.”
livemint.com
Sources
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