The Department of Financial Services (DFS) has assured that the government will be monitoring that the newly notified Merchant Discount Rate (MDR) on high-value UPI transactions is not passed on to consumers.
While there is no concrete anti profiteering regulations in place, the government will be tracking in all possible ways on a daily basis to ensure that consumers are not bearing the cost, confirmed the DFS.
"Monitoring will be done to check that the merchants are not passing on the MDR to the consumers, " said the officials.
The assurance comes after the Centre notified MDR of 0.4% on merchant transactions above Rs 2,000 from October 15, amid fears that merchants may indirectly recover the cost from buyers.
The government on Tuesday introduced a revised framework for UPI merchant payments, with transactions above Rs 2,000 attracting a Merchant Discount Rate (MDR) of 0.4 per cent, capped at Rs 300 per transaction, from October 15, 2026.
Consumers will continue to use UPI free of cost, while person-to-person (P2P) transactions and person-to-merchant (P2M) payments up to Rs 2,000 will remain outside the MDR regime. The government said these low-value transactions account for more than 95 per cent of all UPI P2M transactions.
Small merchants collecting up to Rs 1 lakh a month via UPI QR codes remain fully exempt, a carve-out that officials say protects about 96% of all merchant transactions. UPI QR payments in rural and semi-urban areas will also stay free. Person-to-person UPI payments remain free.