[Inquiry & Insights] UPI's 0.4 Percent MDR: Who Pays for India's Digital Payments?

India has introduced a 0.4 percent Merchant Discount Rate (MDR) on UPI merchant transactions above ₹2,000 starting October 2026, charging merchants directly while barring them from passing fees to customers. This signals a shift from a publicly subsidised payment system to one where merchants bear part of the digital payments infrastructure cost, affecting profitability and acceptance dynamics.

This Wire brief sits within Fusion42's coverage of Fintech, and 45 sources have reported it between 19 Jul 2026 and 15 Oct 2026.