India, Sept. 16 -- UPI Gets MDR Makeover

After a decade of free UPI payments, NPCI will now impose an MDR for select high-value transactions starting October 15. The move marks UPI's most consequential monetisation shift yet. Can the infrastructure commercialise without compromising its inclusivity?

The New UPI Math: Under the framework, P2M UPI payments above Rs.2,000 will attract an MDR of 0.4%, capped at Rs.300 for transactions of Rs.75,000 and above. The charge will apply to merchants, not customers. Banks have been instructed to prevent merchants from passing on the costs to end users.

Meanwhile, P2P payments remain free, while small merchants receiving up to Rs.1 Lakh a month through QR-code transactions will continue to face zer...