GENERAL16 Sept 2026
MDR may push small merchants, price-sensitive consumers towards cash: GTRI
From October 15, UPI payments to merchants above Rs 2,000 will attract a 0.4 per cent Merchant Discount Rate, capped at Rs 300, plus a flat Rs 5 for railways, telecom, insurance and fuel. Think tank GTRI warns this can push small merchants and price-sensitive customers back to cash. So review your payment costs and decide whether cash or cards work better for you.
Key Statutory Highlights
- From October 15, UPI payments to merchants above Rs 2,000 will attract a 0.4 per cent Merchant Discount Rate, with an overall cap of Rs 300.
- A flat concessional Merchant Discount Rate of Rs 5 will apply on transactions above Rs 2,000 in railways, telecom services, insurance and fuel.
- GTRI says keeping UPI free costs the government about Rs 2,000-2,500 crore a year, which is tiny compared with its food and fertiliser subsidies.
Actionable Advice for Taxpayers / Founders:From October 15, review what you actually pay to collect UPI above Rs 2,000, and speak to your CA about whether to absorb it, pass it on, or keep cash and card options open for price-sensitive customers.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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