NSE Expects Short-Term Impact on Transaction Volumes From UPI MDR Charges

New Delhi: The introduction of Merchant Discount Rate (MDR) charges on UPI transactions above Rs 2,000 is likely to weigh on transaction volumes in the short term, but activity is expected to normalise over time, NSE MD and CEO Ashishkumar Chauhan said on Tuesday.

“There may be some impact initially on our transaction volumes in the short term due to the MDR charges above Rs 2,000. After some time, I hope it normalises,” Chauhan said here.

The government has exempted UPI transactions of up to Rs 2,000 to merchants from charges.

On Tuesday, the government set a 0.4 per cent charge on UPI payments above Rs 2,000 to merchants and capped the fee at Rs 300 for payments of Rs 75,000 and above, as it rolled out a framework for large digital merchant payments.

The move marks the end of the zero-MDR regime that has been in place since January 2020. The regime was introduced to promote digital payments but had long been criticised by banks and fintech companies as unsustainable.

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