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Business News›Industry›Banking/Finance›Banking›RBI backs MDR on large-value UPI transactions, says could help expand UPI acceptance

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RBI backs MDR on large-value UPI transactions, says could help expand UPI acceptance
Synopsis

The Reserve Bank of India supports Merchant Discount Rate on large UPI transactions. This move aims to ensure the long-term sustainability of India's digital payments ecosystem. New provisions will apply MDR to person-to-merchant transactions exceeding two thousand rupees. Person-to-person transactions and smaller merchant payments will remain free of charge.

Agencies

The Reserve Bank of India (RBI) has backed the introduction of Merchant Discount Rate (MDR) on large-value UPI transactions, saying the move will help strengthen the long-term sustainability of India's digital payments ecosystem. In a post on X, the central bank said the measure would enable UPI to continue scaling, innovating and serving consumers and businesses across the country.



The RBI said a fair distribution of MDR among ecosystem participants would support continued investment in technology, infrastructure and payment acceptance networks. Such investments, it added, could help expand UPI acceptance, deepen the customer base and sustain growth in transaction volumes.

The introduction of MDR on large-value UPI transactions (i.e., above ₹2,000) is an important step towards strengthening the long-term sustainability of India’s digital payments ecosystem. It will help UPI in continuing to scale, innovate and serve consumers and businesses across…

— ReserveBankOfIndia (@RBI) September 15, 2026

The comments come amid the government’s clarification on the revised MDR framework for UPI payments. Under the new provisions, MDR will apply to specified person-to-merchant (P2M) transactions above ₹2,000, while person-to-person (P2P) transactions will remain free, regardless of the amount transferred. Merchant payments up to ₹2,000 will also continue to remain free. The revised framework is scheduled to take effect from October 15, 2026.

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Read More News on
RBIMDRUPI transactionsdigital paymentsMerchant Discount RateP2M transactionstransaction volumespayment acceptance networkssustainability of digital paymentsReserve Bank of India

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