GENERAL16 Sept 2026
UPI versus cards: What merchants will pay under the new MDR regime
UPI payments above ₹2,000 to certain merchants are no longer free. A new merchant discount rate, or MDR, of 0.4 per cent now applies to these specified payments, ending UPI's zero-cost model for them. This affects business owners accepting such high-value UPI payments. The good news: it stays cheaper than regulated debit-card rates and typical credit-card charges. Check your recent UPI collections to see the impact.
Key Statutory Highlights
- UPI's zero-cost model ends for specified merchant payments above ₹2,000.
- A merchant discount rate of 0.4 per cent applies to those specified UPI payments.
- The new UPI charge stays below regulated debit-card rates and typical credit-card MDRs.
Actionable Advice for Taxpayers / Founders:Review your recent high-value UPI collections and work out how a 0.4 per cent charge sits in your costs or pricing. If you are unsure how it applies to your business, ask your CA to check it.
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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