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NPCI will introduce a 0.4% MDR on select P2M UPI transactions above ₹2,000 from October 15

ICICIdirect Research 16 Sep 2026 DISCLAIMER

News: NPCI will introduce a 0.4% MDR on select P2M UPI transactions above ₹2,000 from October 15, 2026, capped at ₹300 for transactions of ₹75,000 and above. Transactions up to ₹2,000, which account for ~96% of P2M volumes, will remain free, while P2P transactions will continue to attract zero MDR. Small merchants under the P2PM category, including those receiving up to ₹1 lakh per month through UPI, will also remain exempt even if individual transactions exceed ₹2,000. The MDR will be borne by merchants and cannot be passed on to consumers. Concessional rates will apply to certain categories, including ₹5 per transaction for insurance, fuel, telecom and railways, while capital-market transactions such as mutual funds, stockbrokers and securities dealers will attract 0.02% MDR, capped at ₹300. The framework is intended to create a sustainable revenue model for UPI and support investments in infrastructure, cybersecurity, innovation and customer service.

View: The framework creates a new monetisation pool for banks, UPI apps and acquiring participants, while shielding the bulk of everyday transactions and small merchants. Payment aggregators including PayTm, One Mobikwik and Pine labs remain key beneficiary.

Impact: Positive

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