This is a natural fallout of the UPI MDR, according to the understanding of the development. Instead, 5% will be set aside from MDR collections to set up a fund to protect small merchants and help onboard them.
The government is also likely to revamp and relaunch a fresh version of the BHIM app, according to government officials. They are already working on it, the officials said.
India’s Unified Payments Interface (UPI) is moving to a differentiated pricing framework for certain merchant transactions, bringing the economics of the payment ecosystem into sharper focus after years of zero MDR.
From October 15, a 0.4% Merchant Discount Rate (MDR) will apply to eligible person-to-merchant UPI transactions above ₹2,000, subject to a maximum charge of ₹300 per transaction.
Person-to-person transactions and merchant payments up to ₹2,000 will remain free, while categories such as insurance and capital-market payments will have separate rates.
