Understanding UPI MDR: Impact On Digital Payments And Small Businesses

India will impose a 0.4% Merchant Discount Rate (MDR) on UPI transactions above Rs 2,000 starting October 15, payable by merchants with a cap of Rs 300. The move has sparked political debate with opposition leaders warning of burden on small traders and consumers, while the government says 96% of UPI transactions remain free and the policy strengthens digital payment infrastructure.

This Wire brief sits within Fusion42's coverage of Fintech, and 45 sources have reported it between 19 Jul 2026 and 5 Oct 2026.