The new Merchant Discount Rate framework will impose a 0.4% charge on direct UPI payments to merchants above Rs 2,000. The charge will be paid by the merchant to its acquiring bank and will be capped at Rs 300 for transactions of Rs 75,000 and above.

For years, the appeal of UPI has been almost embarrassingly simple: scan, enter the amount, pay and move on. There has been no visible fee attached to the

Small merchants receiving up to Rs 1 lakh a month through UPI QR payments will continue to operate under zero MDR, as per the new framework.

UPI payments above Rs 2,000 will attract a 0.4% Merchant Discount Rate (MDR) for select merchants from October 15. Customers will not pay the charge directly, while small traders, person-to-person transfers and most everyday payments will continue to get protection.