business πΈ UPI MDR: No government cut from merchant fees
A proposed 0.4% MDR on UPI payments over βΉ2,000 will not incur extra costs for consumers, according to government sources. This fee applies to merchants accepting UPI transactions above βΉ2,000 starting from October 15. The revenue will be distributed among banks and participants, with customer banks getting 40% and payment gateways 30%. Person-to-person transfers will remain free, and small merchants earning up to βΉ1 lakh monthly are exempt. The system aims to create a sustainable revenue model for the digital payments ecosystem. πΈ