RBI Governor backs MDR on UPI transactions above Rs 2,000, says cost must be covered

RBI Governor has supported the proposal to introduce a Merchant Discount Rate (MDR) on UPI transactions exceeding Rs 2,000, stating that the cost of processing payments must be borne by someone. Official estimates suggest that the Rs 2,000 threshold would affect only about 5% of all UPI transactions by volume, though these represent nearly 65% of the total transaction value on the platform. Everyday low-value payments such as those for milk, vegetables, groceries, and auto or taxi rides are expected to remain unaffected. UPI recorded 23.7 billion transactions worth Rs 29.9 lakh crore in July alone, underscoring the scale of the platform's usage.