Govt proposes 0.25-0.5% MDR on UPI payments above ₹2,000

The government has proposed a merchant discount rate of 0.25% to 0.5% on UPI transactions above ₹2,000. The change would come through an amendment to Section 10A of the Payment and Settlement Systems Act, included in the Taxation and Other Laws (Amendment) Bill, 2026. Such high-value payments make up roughly 5% of UPI transactions by volume.