Is UPI still free? Understanding the new MDR framework

Grant Thornton Bharat’s PolicyCast is your window into policy, tax, and regulatory developments. Each episode features expert perspectives on issues that matter to businesses, individuals, and the wider economy.

Is UPI becoming a paid service? Not quite.

India’s UPI ecosystem has reached a scale where the conversation is shifting from adoption to sustainability. The new Merchant Discount Rate (MDR) framework introduces a targeted charge for certain higher-value merchant transactions, while keeping consumer payments free.

In the latest episode of hashtag#GTBharat’s PolicyCast, Dharmender Jhamb, Partner and Fintech Industry Leader, Grant Thornton Bharat, explains what has changed, who pays, and what the framework means for merchants, consumers and the wider digital payments ecosystem.

The conversation covers:

• How the 0.4% MDR applies to eligible merchant transactions above INR 2,000.
• Why a INR 300 cap matters for larger transactions.
• Special treatment for essential sectors such as insurance, fuel, utilities and education.
• How the framework protects micro and small merchants.
• What this could mean for the long-term sustainability of UPI.

Listen to the latest episode for a closer look at what the new MDR framework means for India’s digital payments ecosystem.

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