NPCI Advocates for Merchant Discount Rate on UPI Transactions
The National Payments Corporation of India (NPCI) informed the Supreme Court that the zero Merchant Discount Rate (MDR) for Unified Payments Interface (UPI) transactions is unsustainable due to rising operational costs. In August 2026, UPI processed 24.51 billion transactions worth approximately ₹29.82 lakh crore, averaging 791 million transactions daily. The NPCI proposed a 0.4% MDR on Person-to-Merchant (P2M) transactions exceeding ₹2,000, while maintaining free transactions for P2P transfers and P2M payments below this threshold. The NPCI stated that only about 4% of merchant transactions would incur this charge. The move aims to ensure the financial sustainability of the UPI ecosystem, which has seen significant growth but faces substantial operational costs, as highlighted by a Standing Committee on Finance report.
Published 2 days ago • 05 Nov 2026, 07:47 PM IST