Story perspectives

Parliament Passes MDR Framework for Merchant UPI Fees

By Drooid · Sep 15, 2026, 4:07 PM UTC · How we work

Summary

Story summary

Parliament passed an amendment to the Payment and Settlement Systems Act, 2007, creating a Merchant Discount Rate framework.
India's ministry exempted UPI transactions up to INR2,000 from fees on September 14, 2026.
The government has not set an MDR rate, saying any charge will apply only to merchants.
Rahul Gandhi said transactions above INR2,000 represent about 5% of UPI volume and roughly 65% of its value.

History

Historical Context

UPI, launched by NPCI on 11 April 2016 under RBI guidance, grew from 2.5 billion transactions in its first year to over 25 billion annual payments by 2020, making India the world’s largest real-time payment market. In August 2026 Parliament amended the 2007 Payment and Settlement Systems Act to permit merchant-discount charges, shifting fee responsibility from the state to merchants.

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Story summary

Parliament passed an amendment to the Payment and Settlement Systems Act, 2007, creating a Merchant Discount Rate framework.
India's ministry exempted UPI transactions up to INR2,000 from fees on September 14, 2026.
The government has not set an MDR rate, saying any charge will apply only to merchants.
Rahul Gandhi said transactions above INR2,000 represent about 5% of UPI volume and roughly 65% of its value.

1 / 2