Government can charge charge from shopkeepers on UPI payment: ₹ 9 charged on payment of ₹ 3 thousand; Rules may apply in two months

Earlier, the Payment Council of India wrote a letter to Prime Minister Modi to put a 0.3% merchant discount rate.

The central government can charge the shopkeepers i.e. Merchant on UPI transactions of more than Rs 3,000. For this, 0.3% merchant discount rate (MDR) can be re -implemented. That is, if you pay more than Rs 3,000, then the shopkeeper will have to pay a fee of up to Rs 9 to the bank.

The new rules can be brought in view of the increasing infrastructure and operational expenses of banks and payment service providers. According to the NDTV report, new rules can be implemented within 2 months. Recently, PMO, Ministry of Finance and other departments have met. The policy will be implemented only after discussion with all stakeholders (banks, fintech companies, NPCI).

How will the charge be charged?

When you pay more than Rs 3,000 from UPI on a shop, mall, petrol pump or online shopping site, the bank or payment company will charge fees from that trader. The common customer does not have to pay any charge directly. But some shopkeepers may also charge this charge from the customer. Small transactions (up to Rs 3,000) and small shopkeepers will not have any effect, they will remain free as before.

UPI transaction increased by 4% in a month

In May 2025, 18,67 crore transactions took place through Unified Payment Interface (UPI). During this period, a total amount of Rs 25.14 lakh crore was transferred during this period. The number of transactions has increased by 33% in a month.

Payment Council of India wrote letters to Prime Minister

Earlier, the Payment Council of India wrote a letter to Prime Minister Modi. The letter has demanded PM Modi to reconsider the Zero Merchant Discount Rate (MDR) policy. Council, Unified Payments Interface (UPI) and RuPay debit card transactions are in favor of imposing 0.3% merchant discount rate.

The Economic Times has given this information quoting two senior bank officials as saying. Currently, no merchant discount rate (MDR) is imposed on these payment methods, as the National Payments Corporation of India (NPCI) provides facility.

How does MDR work and why removed it?

Prior to 2022, merchants had to pay less than 1% MDR of transaction amount to banks. However, the government removed these charges in the financial year-22 budget to promote digital payment. Since then UPI has become the most used payment method and Rupay has also become quite popular.

Meanwhile, the industry’s insidars say that large retail merchants averages with more than 50% payment card. Therefore, a small fee is unlikely to have any major impact on UPI payment.

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