A report by Aaj Tak Business says the government has announced a 0.40% merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions above ₹2,000 from 15 October 2026. However, the supplied report does not include a government notification, named official statement or other primary document confirming the proposed charge.
The report is based partly on an interview with PhonePe chief executive officer Sameer Nigam, who discussed the confusion surrounding the alleged UPI MDR policy. According to the report, Nigam addressed questions about who would bear the charge, what transactions would be covered and whether customers or small businesses would be affected.
The available material does not provide the full terms of the reported policy. It does not establish whether the proposed 0.40% rate would apply to all UPI transactions above ₹2,000, only selected merchant categories, or a specific payment instrument or use case. It also does not state whether the charge would be paid by merchants, absorbed by payment service providers, or passed on in any form.
That distinction is important because UPI is used across India’s retail economy, including neighbourhood shops, service businesses, transport-linked payments and larger organised merchants. Any change in the cost structure could affect how businesses accept digital payments, but the extent of that impact cannot be determined from the supplied report.
The report also raises the question of whether consumers would pay directly. No customer fee is confirmed in the available material. The article frames this as one of the main areas of confusion and attributes the clarification to Nigam, but it does not reproduce a complete statement or provide the precise regulatory framework governing the alleged MDR.
Small businesses are another important part of the reported discussion. The available content says the PhonePe CEO addressed whether small merchants would be affected, but it does not provide the detailed answer, exemptions, thresholds or implementation arrangements. Without those details, it is not possible to establish the policy’s effect on street-level commerce or low-margin businesses.
MDR refers to a fee associated with processing a digital payment. In practical terms, the distribution of that fee determines how payment networks, banks, apps and merchants share the cost of operating the system. The supplied report identifies this as the central issue but does not provide enough information to map the proposed arrangement or its administrative mechanism.
The report’s publication date is 16 September 2026, and it refers to an implementation date of 15 October 2026. Those dates should be checked against an official government release or notification before the policy is treated as established. The supplied material does not identify the ministry, department, regulator or notification responsible for the announcement.
For urban businesses, the unresolved details matter more than the headline rate alone. A charge applied differently across transaction values, merchant categories or payment channels could produce different effects for small retailers, service providers and consumers. At present, however, the available evidence confirms only that the issue was discussed in the Aaj Tak Business interview and that confusion exists around the reported UPI MDR proposal.
The next editorial step is to verify the alleged announcement through the relevant government or regulatory source and obtain the complete terms of the reported policy. Until that documentation is available, the 0.40% rate, the ₹2,000 threshold and the 15 October 2026 start date should be treated as claims reported by Aaj Tak Business rather than independently established facts.
