RBI Policy
UPI fee small, won't have major impact on volume, says Malhotra
This story was originally published at 14:27 IST on 7 October 2026
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--RBI Malhotra: Don't see drop in UPI volume due to levy of MDR
NEW DELHI – The Reserve Bank of India does not expect the rollout of a merchant discount rate on Unified Payments Interface transactions above a certain size to result in a decline in the total volume of transactions, Governor Sanjay Malhotra said Wednesday. He said a small fee levied on transactions above INR 2,000 will not have a "major impact" on the transaction volumes.
"MDR (merchant discount rate) already a decision has been taken," Malhotra said. "As of now, we do not see any drop in volumes. And I do not personally think that a small fee will have a major impact on the volumes."
The government last month announced the levy of a merchant discount rate of 0.4% on commercial transactions higher than INR 2,000 made through the Unified Payments Interface. The fee will become applicable from Oct. 15. Person-to-person transactions will continue to be free irrespective of the size of the transaction. Small merchants, including street vendors and neighbourhood shops, receiving up to INR 100,000 a month through Unified Payments Interface quick response codes under the person-to-person-merchant category would also continue to enjoy zero merchant discount rate on all transactions. As a result, around 96% of merchant transactions are expected to remain unaffected, the government had said.
The National Payments Corp. of India had said transactions above INR 2,000 in essential and thin-margin sectors, including railways, telecommunications, insurance, fuel, and agricultural inputs, would attract a flat merchant fee of INR 5 per transaction. End
Reported by Shweta
Edited by Rajeev Pai
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