2 publishers · first seen Thu, 05 Nov 2026 16:00 UTC · updated Thu, 05 Nov 2026 16:08 UTC
The National Payments Corporation of India (NPCI) has informed the Supreme Court that the zero Merchant Discount Rate (MDR) for all Unified Payments Interface (UPI) transactions is no longer sustainable due to the expanding digital payment industry's functional costs. UPI processed 24.51 billion transactions worth approximately ₹29.82 lakh crore in August 2026, marking its highest monthly volume. NPCI argued that the MDR framework targets only higher-value transactions, with 96% of all person-to-merchant (P2M) transactions remaining unaffected. The Centre defended the revised MDR framework, stating that it was necessary for the long-term sustainability of the digital payments ecosystem and that the ₹2,000 threshold was introduced to protect ordinary retail transactions and small merchants.
The NPCI has assured the Supreme Court that merchants cannot pass on MDR charges to customers under the revised UPI pricing framework. The MDR of up to 0.4% would apply to P2M transactions exceeding ₹2,000, while transactions below the threshold and small merchants would remain exempt.
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