UPI Charges Policy as of 2026

3. What’s Proposed for LARGE BUSINESSES/MERCHANTS

This is still under discussion. No final notification yet.

Proposed framework:

Who: "Large merchants" - likely businesses with high turnover. Earlier mandate was for companies with ₹50+ crore turnover

When: Only on transactions above ₹2,000

How much: MDR below 0.5% being discussed

Who bears it: Merchant pays to bank/UPI provider. Govt has said it should NOT be passed to customers

Purpose: Cover infrastructure costs as govt subsidy is reduced

Current status: Parliament amendment introduced to allow MDR legally. Rates and final cutoff not announced.

4. Why is Govt talking about MDR now?

Subsidy cut: Digital payment incentive budget dropped from ₹3,500 cr to ₹437 cr in FY25

Rising costs: Banks + NPCI + Apps say server, fraud, compliance costs are growing with 500M+ daily UPI transactions

Sustainability: To keep UPI free for users, someone needs to pay for the infra. Model being discussed: Large businesses pay small MDR

FM’s logic: “Digital payments are a public good. People should access freely. We intend higher transparency through digitisation.”