Diwali is over. Now, there's a lot of talk about new charges on UPI payments. It's reported that a Merchant Discount Rate (MDR) will be levied on some UPI payments over ₹2,000. The National Payments Corporation of India (NPCI) had originally planned to implement this rate from October 15th. However, keeping the Diwali festival in mind, this decision was postponed. Now, when will this new rate actually be implemented, and will it impact customers' pockets? Let's find out.

What is the charge for payments above Rs 2,000?

According to an FAQ issued by NPCI on September 15th, UPI payments above ₹2,000 accepted by certain merchants will be charged a 0.4% MDR, but this charge is capped at ₹300. This means that no matter how large the transaction amount, the MDR will not exceed the limit set for the transaction.

For example, if a customer makes a payment of ₹1 lakh to a shopkeeper using UPI, a 0.4% rate of ₹400 is charged. However, due to the cap, the shopkeeper will have to pay ₹300 as MDR.

Different charges for certain transactions
Different rates have been set for certain sectors, such as railways, telecom, insurance, and fuel. A flat charge of ₹5 will be levied on every transaction above ₹2,000 in these categories. Meanwhile, a 0.2% MDR will apply to payments related to mutual funds, shares, and stock brokers. The maximum charge limit for these transactions is also ₹300.

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