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UPI MDR to apply in 11 countries with UPI functionality

Government introduces 0.4% MDR on UPI merchant transactions in 11 countries.

New York Editorial News Desk September 24, 2026 1 min read

The Brief

  • MDR framework applies to UPI transactions in 11 countries.
  • 0.4% MDR on transactions above Rs 2,000 with Rs 300 cap.
  • Government will not extend October 15 implementation date.

The Finance Ministry has announced that the new Merchant Discount Rate (MDR) framework for Unified Payments Interface (UPI) transactions will apply in 11 countries where UPI is currently operational.

The MDR framework introduces a 0.4 percent fee on specified merchant transactions exceeding Rs 2,000, with a maximum charge of Rs 300 per transaction.

Officials stated that consumers will not be directly charged for UPI payments, and person-to-person transactions will remain free. Eligible merchant transactions below the Rs 2,000 threshold will also not be subject to MDR.

UPI is currently functional in 11 countries, including the UAE, France, Bhutan, Sri Lanka, Nepal, Singapore, Mauritius, Qatar, Cambodia, Greece, and the Maldives.

The Finance Ministry explained that the revised MDR structure aims to establish a more sustainable financial model for the UPI ecosystem, which has previously operated under a zero-MDR regime for merchant transactions.

Sources added that the MDR does not fully cover the costs of sustaining the UPI ecosystem and that the rates were decided by the Indian Banks' Association (IBA) in consultation with stakeholders.

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