MDR Charge: Will Grocery and Vegetable Shopkeepers Also Have to Pay UPI Charges? Know Latest Updates
UdaipurTimes, Aug 09 2026 | UPI Charges Update: The Narendra Modi government recently passed an amendment bill allowing the government and banks to potentially levy a Merchant Discount Rate (MDR) or small charges on specific merchant UPI transactions above ₹2,000.
Recently, there has been a huge debate over ths 'MDR charge' on UPI. This charge has received a response from everyone, from UPI customers to small traders. It is being said that if the Merchant Discount Rate (MDR) is introduced, it could have a huge impact, and the online payment system could be severely affected.
Many people are claiming that this may indirectly increase the burden on common users. However, the Finance Minister said that no firm decision has been taken yet regarding the imposition of this charge. However, even if it is introduced in the future, it will not have any impact on customers.
The biggest question at the moment is- if this new charge is introduced, will grocery stores, ice cream vendors, small shopkeepers, sweet shops, street hawkers or small shopkeepers also have to pay a charge? The Payments Council of India, which is run under the auspices of IAMAI, has answered this question.
UPI to remain free for consumers, says Payments Council of Indiahttps://t.co/oLcEdIDtn4
— PMO India (@PMOIndia) August 8, 2026
via NaMo App pic.twitter.com/piJFV7grpI
Small Traders Will Not Be Charged
The Payments Council of India has said that there is no proposal to charge UPI customers and small traders like grocery stores can use UPI without paying MDR charges.
PCI said that since its launch in 2016, UPI has been free for consumers. Every Indian can continue to make digital payments without paying any transaction fees. The council further clarified that small merchants will not have to pay Merchant Discount Rate (MDR) for UPI payments.
What is MDR Charge?
Merchant discount rate is a fee that merchants pay to banks or payment service providers for making digital transactions. While paying consumers do not have to pay this charge, there is currently speculation that MDR payments may discourage small merchants from using UPI.
