How Proposed UPI Fees Above Rs 2,000 Compare With Credit Card Charges? Scenarios Explained

How does the proposed UPI charge compare with what merchants typically pay when customers use credit cards? News18 explains

The Unified Payments Interface (UPI) will no longer be completely free for merchants handling larger transactions from October 15, with the National Payments Corporation of India (NPCI) introducing a 0.4% Merchant Discount Rate (MDR) on eligible person-to-merchant payments above Rs 2,000.

The charge will be borne by merchants, not customers and will be capped at Rs 300 per transaction, meaning the MDR will reach its maximum at a payment of Rs 75,000 and remain capped at Rs 300 for larger transactions. The move brings a cost to a section of UPI’s merchant ecosystem for the first time in years and raises a practical question: how does the proposed UPI charge compare with what merchants typically pay when customers use credit cards?