New Delhi | 17 September 2026: ASSOCHAM has welcomed the Government’s new UPI framework for large‑value merchant transactions, highlighting its role in strengthening UPI sustainability, supporting innovation, mitigating frauds, and enhancing wider acceptance across India.
Shri Nirmal K. Minda, President, ASSOCHAM, stated that the framework will support payment infrastructure and acceptance networks, enabling UPI to expand further and serve both consumers and businesses nationwide.
Key Highlights of the Framework
- Zero MDR for P2P transactions: All person‑to‑person UPI transfers remain free, irrespective of amount.
- Zero MDR for small merchants: Merchant payments up to ₹2,000 remain free.
- Micro units protected: Over 3 crore micro businesses with monthly turnover below ₹1 lakh will face no MDR charges under the P2PM category.
- Minimal impact: Around 96% of merchant transactions remain unaffected, with MDR applying to only ~4% of P2M transactions.
MDR Structure for Specific Transactions
- Merchant transactions above ₹2,000: MDR of 0.4%, capped at ₹300 for transactions of ₹75,000 and above.
- Essential & thin‑margin sectors (railways, telecom, insurance, fuel, agricultural inputs): Flat MDR of ₹5 on transactions above ₹2,000.
- Capital market transactions (mutual funds, securities, brokers, dealers): MDR of 0.02%, capped at ₹300 per transaction.
Dedicated Fund for UPI Adoption
- 5% of total MDR collections will be allocated to a dedicated fund.
- Focused on promoting UPI adoption among small merchants.
- Supports wider acceptance in rural and semi‑urban areas.
Shri Nirmal K. Minda, President, ASSOCHAM: “By creating a sustainable revenue mechanism while protecting consumers and small merchants, the framework can support greater investment in innovation, infrastructure, and payment acceptance. This will further strengthen UPI’s role in driving India’s digital transformation.”
Strategic Impact:
The framework balances consumer protection with merchant sustainability, ensuring:
- Continued zero MDR support for micro and small businesses.
- Stronger investment in innovation and infrastructure.
- Wider merchant acceptance networks.
- A more inclusive and sustainable digital payments ecosystem.
