India imposes 0.4% merchant fee on UPI payments above Rs 2,000

The Indian government has introduced a 0.4% merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions exceeding Rs 2,000, effective October 15. The fee, which will be borne by merchants, is capped at Rs 300 for transactions of Rs 75,000 or more. The National Payments Corporation of India confirmed that an 18% Goods and Services Tax (GST) will be applicable on the MDR charge, which is expected to generate a new revenue stream for payment service providers.