India, Sept. 15 -- The announcement of a 0.4% Merchant Discount Rate (MDR) on UPI payments above Rs.2,000 made to merchants has raised several questions on how the charges will work, who will bear them and can these be shifted on to consumers in any way.

The National Payments Corporation of India (NPCI) on Tuesday issued a clarification on the MDR - from the Rs.2,000 threshold for merchant payments and fee caps. It further addressed queries on fuel purchases, utility bills, platform fees and person-to-person transactions.

On the introduction of 0.4% MDR above transactions of Rs.2,000, the NPCI said that UPI processes billions of transactions every month.

"The MDR is distributed only amongst the UPI ecosystem, to further invest into inf...