MUMBAI, September 16 — The National Payments Corporation of India (NPCI) issued fresh regulatory guidelines introducing a 0.4% Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) commercial transactions exceeding ₹2,000, effective October 15, 2026.
The new policy applies strictly to merchant transactions (P2M) processed via prepaid payment instruments (PPI) and large commercial merchant accounts. Small merchants, retail shopkeepers, and person-to-person (P2P) bank account transfers remain completely exempt from any transaction charges.
NPCI stated that the revenue share will support digital payment infrastructure, fraud prevention mechanisms, and server bandwidth expansion.
Digital payment ecosystem guidelines and NPCI mandates are core economy and banking awareness topics. Candidates should note that NPCI was established in 2008 as an umbrella organization for operating retail payments under the Payment and Settlement Systems Act, 2007.