UPI MDR Charges: Nowadays, from buying vegetables to shopping and bill payment, UPI is used everywhere. In such a situation, if UPI payment fees start affecting the prices of goods, then the burden on your pocket may also increase. A report by IIT Bombay has warned that despite the ban on directly charging shopkeepers under the new MDR framework, companies may make goods more expensive to cover their costs. This may also cause loss to those customers who make UPI payment of less than Rs 2,000.
According to the report of IIT Bombay, despite the ban on direct surcharge on merchants under the new MDR framework, companies can increase the prices of goods to cover their costs, which will put a burden on the customers.
What is the whole matter?
According to the report, companies providing payment services can get around Rs 18,000 crore annually from the new Merchant Discount Rate (MDR) framework. But if shopkeepers add the cost of this fee to their selling prices, then it can affect the common customers as well. The report says that it is necessary to make changes in the current proposal before implementing it. If this does not happen, people’s trust in UPI may decrease.
Fees will be charged on which UPI payments?
Under the UPI MDR framework, MDR up to 0.40% may be levied on merchant payments above Rs 2,000. Its maximum limit will be Rs 300 per transaction. At the same time, there will be no fee on sending money between two people and merchant payment up to Rs 2,000. A fixed fee of Rs 5 is proposed on transactions in some important sectors. At the same time, there will be a fee of 0.02% on transactions related to capital market, the maximum limit of which is Rs 300.
Estimated earning of Rs 1,500 crore every month
Based on the data of August 2026, it has been said in the report that merchant UPI transactions were worth about Rs 9 lakh crore. Of these, payments worth about Rs 6 lakh crore were of more than Rs 2,000. If an average MDR of 0.25% is imposed, then payment service companies can earn about Rs 1,500 crore every month.
Credit card expenses also likely to fall on customers
Another problem related to credit cards has been mentioned in the report. Shopkeepers often keep the price of goods the same for those paying through cash, UPI, debit card and credit card. In such a situation, the burden of credit card fees may also fall on customers paying through other means.
IIT Bombay gave these suggestions
According to the report, banks earned a net interest margin of Rs 4.84 lakh crore from the amount deposited in current and savings accounts in the financial year 2025-26. The report suggests that banks should give about 3% of this earning, i.e. about Rs 15,000 crore annually, to run the UPI system.
It has also been said in the report that when there is talk of imposing fees on digital payments, then attention should also be paid to the facility of withdrawing pre-cash from ATMs, whereas a lot is spent on currency management. Apart from this, a demand has been made to keep the transactions related to recovery of debt and repayment of loan out of MDR. This will not increase the additional cost of digital payment, especially for those taking loans from microfinance.
The report has suggested that the fee should be imposed only on online merchants and businesses with an annual turnover of more than Rs 50 crore. The maximum limit of MDR to be charged as per percentage should be Rs 40. The money received from this should be used to expand and secure the UPI network.
Source: ndtv.in
