RBI says UPI merchant discount rate strengthens long-term sustainability

The Reserve Bank of India stated that introducing a Merchant Discount Rate on large-value UPI transactions supports the long-term sustainability and scalability of digital payments.

A 0.4% fee will be levied on merchant transfers exceeding ₹2,000 starting October 15, while everyday peer-to-peer transfers and small merchant payments remain completely free for users.

The RBI noted that a fair distribution of MDR among ecosystem participants will fund ongoing investments in acceptance networks, technology infrastructure, and transaction volumes.