GENERAL18 Sept 2026
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The government has introduced a Merchant Discount Rate (MDR) on person-to-merchant UPI (Unified Payments Interface) payments above ₹2,000, effective October 15. Merchants pay this fee, not customers, and it is capped at ₹300 for payments of ₹75,000 or more. Everyday small payments and person-to-person transfers stay free. If you run a business, check whether your high-value UPI collections now attract this charge.
Key Statutory Highlights
- The new Merchant Discount Rate applies to person-to-merchant UPI payments above ₹2,000 and comes into effect from October 15.
- The charge is paid by merchants, is capped at ₹300 for transactions of ₹75,000 or more, and person-to-person transfers plus most everyday merchant payments stay free.
- Payments above ₹2,000 were barely 4% of person-to-merchant UPI volume in FY26 but roughly two-thirds of transaction value.
Actionable Advice for Taxpayers / Founders:Review your high-value UPI collections with your payment provider to see whether this new merchant charge applies to you, and adjust your payment mix or pricing before it takes effect on October 15.
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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