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Government paves way for MDR fee on UPI, RuPay debit card payments to big merchants
['Anish Mondal', 'Siddharth Upasani', 'Siddharth Upasani Is A Deputy Associate Editor With The Indian Express. He Reports Primarily On Data', 'The Economy', 'Looking For Trends', 'Changes In The Former Which Paint A Picture Of The Latter. Before The Indian Express', 'He Worked At Moneycontrol', 'Financial Newswire Informist', 'Previously Called Cogencis . Outside Of Work', 'Sports']
The Indian Express
Usually in the range of 1-3%, a Merchant Discount Rate (MDR) is levied on merchants by banks that process debit and credit card payments to help meet transaction processing, settlement, and infrastructure costs.
Since January 2020, there has been no MDR on RuPay debit cards and UPI transactions to promote the adoption of digital payments across the country.
In 2025-26, Rs 2,196.21 crore was paid as subsidy, up from Rs 1,922.77 crore in 2024-25.
In July, a total of 2,236 crore UPI transactions worth Rs 29.88 lakh crore were made.
As such, the finance ministry’s proposal in the amendment bill effectively sets the ground for UPI and RuPay debit card payments to large merchants such as Amazon and Flipkart to attract a Merchant Discount Rate (MDR) fee.