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UPI MDR Is Back: The Hidden Cost to You

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UPI is no longer entirely free. From October 15, merchant payments above ₹2,000 will attract a 0.4% MDR, while smaller transactions and person-to-person transfers remain exempt. But if merchants cannot surcharge customers directly, where does that cost go? IIT Bombay’s Professor Ashish Das tells The Morning Brief why businesses may quietly fold it into prices, forcing small-ticket shoppers to subsidise larger purchases. He also explains why online platforms are different, whether high-value payments could drift back to cash, and the policy question: should UPI be treated as commercial infrastructure—or as a public good funded by the government?

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