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MDR charges on UPI transactions above Rs 2,000 could drive small merchants back to cash: GTRI
Sep-17-2026

The Global Trade Research Initiative (GTRI) has said that The Merchant Discount Rate (MDR) charges on UPI transactions above Rs 2,000 may push small merchants and cost-conscious consumers back to cash. With effect from October 15, UPI payments to merchants (P2M) above Rs 2,000 will attract a 0.4 per cent MDR with an overall cap of Rs 300. 

Besides, a flat concessional MDR of Rs 5 would be applicable on specific merchant categories such as railways, telecom services, insurance, and fuel for transaction above Rs 2,000. GTRI Founder Ajay Srivastava said that UPI fees are not about revenue as keeping UPI free costs the government Rs 2,000-2,500 crore annually.

He stated ‘This is tiny compared with subsidies of Rs 2.03 lakh crore for food, Rs 1.68 lakh crore for fertilisers, Rs 22,800 crore for agricultural credit and Rs 12,500 crore for petroleum and LPG’. He noted the NPCI (National Payments Corporation of India) itself earned Rs 3,270 crore and retained a surplus of Rs 1,552 crore in FY2025. He added that clearly, this is not a revenue problem and charging for UPI will not save public money.


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