RBI Imposes Merchant Discount Rate on UPI Payments; Protests Erupt
- Reports
- 8
- Developments
- 2
- Repetition
- 75%
New informationRepeats or wire copies
What happened
The Reserve Bank of India introduced a Merchant Discount Rate (MDR) framework for person-to-merchant (P2M) UPI payments, effective from October 15, 2026. Under this new system, a 0.4 per cent MDR applies to P2M transactions exceeding Rs 2,000. This charge is borne by merchants and is capped at Rs 300 for transactions of Rs 75,000 or more. The RBI Deputy Governor, Shirish Chandra Murmu, noted that the apprehension that this charge would spur a surge in cash transactions was unlikely to materialize.
Why it matters
The introduction of the MDR framework marks a significant policy shift in the national payment ecosystem. Traders in Indore, Madhya Pradesh, have organized protests against the charges, leading to a 'No UPI Payment Day' declared by some local businesses. Meanwhile, the Petrol Dealers Association, Mumbai, warned the RBI that they might discontinue UPI payments above Rs 2,000 if the charges are imposed.
Who's involved
- Reserve Bank of IndiaCentral bank of India that introduced the MDR framework on UPI payments.
- Government of IndiaThe legislative, executive and judiciary authority of India through which the policy is implemented.
- Madhya PradeshState where local commerce disruptions and protests against the charges are occurring.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- PaytmSpeculative
The company might face financial pressure due to the new mandatory cost structure applied to its payment processing services.
How it developed
Newest first. Tap a step to see who reported it.MDR has been imposed on UPI payments, marking a significant policy shift in the payment ecosystem.1 source
RBI implements MDR for UPI payments; Murmu comments on cash usage impact.1 source
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The entities involved
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Reserve Bank of India
central bank of India