UPI MDR Charges? What ₹0.30 Means for Your Shop

Traders in Kerala are threatening to boycott UPI over fears that a merchant fee (MDR) may return on digital payments. Here's what that means for small business owners and everyday shoppers across India.

Here's what happened: Trader associations in Kerala announced plans to boycott UPI payments on October 15 to protest the possible return of merchant transaction fees on digital payments.. UPI transactions have been free for merchants since January 2020 when the government abolished MDR on RuPay debit cards and UPI, bearing the cost through an incentive scheme for banks.. With UPI transaction volumes now crossing 1,000 crore per month nationally, payment companies and banks have repeatedly lobbied for MDR to be reintroduced to make the system financially sustainable..

What you should do: Check whether your payment service provider has communicated any upcoming changes to transaction fees — log into your business banking app or POS dashboard this week.. If you run a small business, calculate your average daily UPI collections and model what even a 0.25% MDR would cost you monthly — factor this into your pricing review.. As a consumer, watch for surcharges at local shops — any merchant charging extra for UPI payments without disclosure is violating NPCI guidelines and can be reported at npci.org.in..

NPCI rules currently prohibit merchants from passing MDR costs to consumers as a surcharge. If a shop charges you extra for paying via UPI, you can file a complaint directly on the NPCI grievance portal.

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