Concerns Rise Among Mumbai Traders Over Proposed MDR Levy on UPI Payments

Concerns are growing among small business owners and traders in Mumbai regarding a proposed new policy introducing a 0.4 per cent Merchant Discount Rate (MDR). This charge applies to eligible person-to-merchant UPI transactions exceeding Rs 2,000. The new MDR framework is scheduled to come into effect on October 15, 2026. Affected shopkeepers stated that they worry this additional merchant-side cost will impact their already rising operating expenses.

The proposed MDR introduces a new cost structure for digital transactions, prompting small business owners to consider limiting digital payments or returning to cash transactions. Business owners expressed concern that this new charge adds to existing taxes and operating costs amidst rising rents and staff salaries.