CNN Central News & Network-ITDC India Epress/ITDC News Bhopal: Merchant Discount Rate, or MDR, is once again in focus in discussions around digital payments. However, MDR on card networks such as RuPay, Visa and MasterCard is not a new charge. Banks and payment processors have already been charging MDR from businesses that accept card payments. The rate may vary depending on the type of payment, card and merchant category.
The recent discussion mainly concerns charges linked to UPI and RuPay debit cards. From 15 October 2026, a provision has emerged to apply MDR of up to 0.4% on eligible merchant UPI transactions above ₹2,000. For general merchant transactions of ₹75,000 or more, the maximum cap will be ₹300. Transactions up to ₹2,000 and person-to-person payments have been kept outside the charge.
Importantly, MDR is generally not a charge collected directly from customers, but a payment-processing fee linked to the merchant. The government has asked banks to ensure that the burden of the new UPI MDR is not passed on separately to customers.
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