Centre mulls bringing back MDR charges on UPI and RuPay transactions if your annual turnover exceeds…

The government may re -submit the deducting price of the merchant discount on UPI and RUPAY transactions for adult traders, which affects the scene of digital payments.

The central government is considering re -submitting commercial discount price fees (MDR) on the transactions facing the interface of the unified payments (UPI) and the Robai discount cards, as mentioned in economic times. This proposal, which is now being seen by relevant departments, began by banking institutions. The MDR, which has been previously canceled to encourage digital payments, can apply to merchants with an annual rotation of more than 40 rupees of Cham.

With a MDR waiver since the FY22 budget, the government explores the implementation of the gradual pricing system. These largest merchants who face higher fees will see, while those who have a circulation under 40 rupees will continue to enjoy free transactions. “The logic is that if the adult merchants who have card machines pay MDR on other payment tools such as Visa and MasterCard debit cards and all forms of credit card, then why can’t they pay a fee for UPI and RUPay cards?” One of the leading bankers participating in the discussions.

Before removing MDR fees, paying traders less than 1 % of the amount of transaction as MDR for banks. The reinstalization aims to settle the stadium stadium as Upi and RUPAY are dominant in retail payments. Industry voices indicate that the largest merchants are already accustomed to pushing MDR on other platforms and can absorb similar fees on UPI and RUPay transactions.

One of the basic motives for returning these fees is the financial sustainability of the payments and technology companies. “Payment companies are now organized under the Pa-Onine bases. The cost of compliance has increased dramatically; if they cannot earn money on payments, the companies will become unprecedable,” one of the main bankers pointed out.

Those who know the industry highlight that although the government has supported banks and technology to provide these services for free, the current allocation of 437 rupees for payment subsidies compared to 3500 rupees. According to what the banks are still waiting for the late support payments from the previous year.

The National Payments Foundation in India (NPCI) stated that UPI facilitated 16 billion transactions in February 2025, amounted to approximately 22 crores of Cham rupee. The huge size of transactions emphasizes the decisive role of UPI in the ecosystem for digital payment in India, but also highlights the financial pressure on service providers who work without MDR.

Since the government weighs these considerations, the possible re -submission of MDR fees remain a controversial problem, with repercussions on the adult retailers and the broader scene of digital payments. Executive officials in the payment industry continue to communicate with policy makers, and seek a solution that balances financial sustainability with the growth of digital transactions.