Archive · 15 Sep 2026
Panel to Decide UPI MDR Charges Above ₹2,000 Soon
A committee will soon decide whether some businesses should pay a fee when customers use UPI.
This fee is called the merchant discount rate, or MDR.
The proposed discussion concerns merchant payments above ₹2,000.
UPI payments between people will stay free.
Payments up to ₹2,000 and RuPay debit card payments are also protected from charges under the government notification.
The committee may decide that only large businesses should pay.
The money could be shared among banks and other payment companies.
Supporters say fees could help pay for UPI’s technology, security and future growth.
Congress says the notification may create a path for fees on higher-value UPI payments.
The 22-member UPI and Services Steering Committee is expected to decide soon on MDR charges for merchant UPI transactions above ₹2,000.
A September 14 notification bars banks and system providers from imposing charges on UPI payments up to ₹2,000 or RuPay debit card payments.
Person-to-person UPI transfers will remain free, while the committee will determine whether higher-value charges apply only to large merchants.
Industry estimates range from about 25–30 basis points to a tiered 0.3–0.5% MDR for eligible transactions.
The committee will also consider revenue sharing among banks, UPI applications, PSP banks and payment aggregators.
- Who
- The 22-member UPI and Services Steering Committee, including representatives of banks, payment service providers, the Indian Banks’ Association and Payments Council of India, will decide the framework.
- What
- The committee will determine whether and how MDR applies to merchant UPI transactions above ₹2,000, and how the resulting revenue is distributed.
- When
- A decision is expected soon, with one report saying the committee may meet this week; the relevant government notification is dated September 14.
- Where
- The decision concerns India’s UPI and RuPay digital payments ecosystem.
- Why
- The stated goals include financial self-sustainability, market expansion, investment in infrastructure and cybersecurity, and reducing reliance on government subsidies.
Government and industry rationale
Opposition concerns
Need for MDR
Government and industry rationale
The government and industry sources say a sustainable funding mechanism is needed to support UPI infrastructure, cybersecurity, fraud prevention, market expansion and long-term growth.
Opposition concerns
Congress alleges that the notification has quietly paved the way for fees on UPI transactions above ₹2,000.
Scope of potential charges
Government and industry rationale
The government says consumers will not be charged and that the vast majority of ordinary, low-value merchant transactions will remain free; possible MDR would apply to a limited category above a threshold.
Opposition concerns
The Opposition argues that allowing charges above ₹2,000 creates a route for fees on higher-value UPI transactions, although the committee has not yet finalised the scope.
Financial sustainability
Government and industry rationale
Supporters say the current zero-MDR model relies on banks, NPCI, payment service providers and government subsidies, and may not support the next phase of expansion.
Opposition concerns
The articles report concern that introducing charges could affect the low-cost model that helped promote UPI, while the exact impact depends on the committee’s final framework.
- Protected UPI payments
- UPI transactions up to ₹2,000 cannot be charged under the September 14 notification.
- Protected card payments
- RuPay debit card payments cannot be charged under the notification.
- Person-to-person transfers
- All person-to-person UPI transactions will remain free.
- Possible MDR range
- Industry estimates include about 25–30 basis points, while some experts expect a tiered 0.3–0.5% charge.
- Potential revenue
- A 25-basis-point MDR on eligible transactions could generate nearly ₹13,000 crore annually, according to preliminary calculations.
- Committee size
- The UPI and Services Steering Committee has 22 members.
- Revenue recipients under discussion
- Possible recipients include issuing banks, UPI applications, PSP banks and payment aggregators that onboard merchants.
