UPI Free Forever? 0.40% MDR Could Change That
A possible Merchant Discount Rate on UPI could charge large merchants 30-40 basis points per transaction. Small merchants and low-value payments may stay exempt. But could merchants quietly pass this cost to you? Here's what to watch.
Indians make 18 billion UPI transactions a month — that's ₹20 lakh crore moving for free every 30 days.
Your UPI payment could soon cost merchants — but will it reach your wallet?
Key Takeaways
Keep using UPI normally — no consumer-side fee exists today; only act if an official RBI or government notification is released.
Watch your grocery and retail bills over the next 6-12 months — if MDR passes, large merchants may adjust prices to recover the new cost.
If you own a small business, verify your annual turnover classification now so you know whether a potential MDR exemption would apply to you.
A possible Merchant Discount Rate on UPI could charge large merchants 30-40 basis points per transaction. Small merchants and low-value payments may stay exempt. But could merchants quietly pass this cost to you? Here's what to watch.
Here's what happened: A brokerage report suggests UPI may see a Merchant Discount Rate of 30-40 basis points, charged to large merchants — not consumers — per transaction.. Small merchants and low-value UPI transactions are expected to remain fully exempt under any proposed MDR framework, protecting everyday neighbourhood payments.. RBI Governor Sanjay Malhotra has not confirmed any timeline, saying it is too early to comment — meaning no rule change is imminent right now..
What you should do: Keep using UPI normally — no consumer-side fee exists today; only act if an official RBI or government notification is released.. Watch your grocery and retail bills over the next 6-12 months — if MDR passes, large merchants may adjust prices to recover the new cost.. If you own a small business, verify your annual turnover classification now so you know whether a potential MDR exemption would apply to you..
MDR on credit card UPI transactions already exists — only UPI linked to bank accounts (savings/current) is zero-MDR. If you pay via credit card on UPI, your merchant already bears a cost today.
For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.
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- [1]“Will UPI payments remain free forever? Bernstein says consumers likely to stay unaffected; 30-40 bps MDR possible” mint - money · 5 Aug 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.