MDR On UPI Is Here, But Who Foots The Bill?

From October 15, India introduces a 0.4% MDR fee on UPI payments above ₹2000 (capped at ₹300 for amounts from ₹75,000). Small merchants with monthly turnover up to ₹1 lakh are exempt, but if they exceed the limit for three consecutive months, they move to the standard category. Bernstein estimates the MDR market will reach ₹22,000 crore per year by FY28.

• MDR rate is 0.4% on transactions above ₹2000, cap ₹300 for amounts from ₹75,000
• Exemption for merchants with turnover up to ₹1 lakh per month via QR codes
• Bernstein: by FY28 fees to reach ₹22,000 crore, banks to get ₹14,000 crore
• RAI warns of drop in UPI acceptance among small retailers during festive season