NPCI to add 0.4% MDR on select UPI transactions
NPCI is planning to introduce a 0.4% fee (called MDR) on certain UPI transactions to help cover rising operational costs, about ₹13,000-15,000 crore out of its yearly ₹21,000 crore bill.
The good news? CEO Dilip Asbe says 96% of UPI payments will stay free, so most users won't feel the change.
This move is mainly to attract fresh investments that had slowed down since UPI stopped charging fees six years ago.
NPCI fee mostly borne by merchants
Most of the new fee will come from merchants who already pay similar charges on credit card payments, so it's unlikely to hit small businesses hard.
The extra money will go into boosting tech infrastructure (think better cybersecurity) and setting up a fund to support small merchants over the next three years.
NPCI also hopes to launch an "agentic-payments" framework (pending RBI approval) to help smaller shops become discoverable to a wider customer base without having to depend on large platforms that charge commissions of 20-30%, while keeping extra costs away from regular customers.