Indian government unveils UPI MDR above ₹2,000 aiding small businesses

Business Sep 15, 2026

Big update for digital payments: The Indian government just rolled out a new UPI policy, adding a small fee called Merchant Discount Rate (MDR) on specified large-value merchant transactions above ₹2,000.

The goal? To help more small businesses get comfortable with digital payments and keep the system running smoothly.

UPI MDR 0.4% capped ₹300

Now, if you pay over ₹2,000 to a merchant using UPI, there's a 0.4% MDR (capped at ₹300 for really big spends).

But if you're shopping at local stores where the owner makes up to ₹100,000 per month and uses a QR code, there's no extra charge.

The money collected from MDR will be split between banks, payment apps, and payment service providers, basically making sure UPI stays reliable and keeps improving.