New Delhi: The National Payments Corporation of India (NPCI) has notified a Merchant Discount Rate (MDR) of 0.4% on Person-to-Merchant (P2M) UPI transactions above Rs. 2,000.

However, Person-to-Person (P2P) UPI transactions will continue to remain free, according to the notification.

The MDR will apply to eligible UPI payments made to merchants where the transaction value exceeds Rs.2,000. For transactions of Rs.75,000 and above, the MDR will be capped at Rs.300 per transaction.

The move is expected to have a direct impact on high-value UPI payments made to merchants, while ordinary person-to-person transfers will not attract any MDR.

UPI has emerged as one of India’s most widely used digital payment systems, with millions of transactions being processed every day.