Archive · 23 Sep 2026
New UPI MDR framework may help SBI recover costs
Banks spend money to process digital payments.
For a long time, merchants did not pay an MDR fee on UPI payments.
A new rule will charge a small fee on some larger merchant payments.
The fee will be 0.4% for eligible transactions above Rs 2,000.
Transactions worth Rs 75,000 or more will have a maximum fee of Rs 300.
The rule starts on October 15.
SBI expects the money to cover most of its payment-processing costs.
It also expects to earn a modest surplus because it handles many UPI transactions.
State Bank of India expects the new MDR framework to recover most UPI processing costs and generate a modest surplus.
The framework will impose a 0.4% MDR on person-to-merchant UPI transactions above Rs 2,000.
MDR on transactions of Rs 75,000 or more will be capped at Rs 300 per transaction.
The new guidelines will take effect on October 15.
SBI processed 6.21 billion UPI transactions worth Rs 7.65 lakh crore in August, according to NPCI data.
- Who
- State Bank of India, payment service providers, banks and merchants using UPI.
- What
- A new merchant discount rate framework will charge fees on certain person-to-merchant UPI transactions.
- When
- The guidelines will take effect on October 15; SBI’s cited transaction data is for August.
- Where
- The UPI payments ecosystem covered by the new framework.
- Why
- The framework is intended to help banks and payment providers recover technology and infrastructure costs from processing UPI payments.
- MDR rate
- 0.4% on person-to-merchant UPI transactions above Rs 2,000
- Maximum fee
- Rs 300 per transaction for transactions of Rs 75,000 and above
- Effective date
- October 15
- SBI August volume
- 6.21 billion UPI transactions
- SBI August value
- Rs 7.65 lakh crore
- Expected impact on SBI
- Recovery of most processing costs and a modest surplus
- Source of transaction data
- National Payments Corporation of India