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SBI UPI Charges: 0.4% MDR on Payments Over Rs 2000!
24 Sep
Summary
- SBI will impose a 0.4% MDR on UPI payments over Rs 2000.
- Charges are split among issuing bank, acquiring bank, and apps.
- SBI expects surplus revenue from MDR implementation.
Beginning October 15, 2026, the State Bank of India (SBI) will implement a Merchant Discount Rate (MDR) of 0.4% on Unified Payments Interface (UPI) transactions exceeding Rs 2,000. This marks the first instance of MDR being applied to UPI payments since 2020.
The revenue generated from these charges will be distributed among various entities, including the issuing bank, acquiring bank, payment gateways, and UPI applications. SBI, being a major player in card issuance and possessing its own payment gateway and UPI application services, expects to benefit significantly, potentially generating surplus income.
SBI is currently assessing the full impact of these new charges. Concerns have been raised about users potentially splitting transactions to avoid the MDR, which could increase system volumes without a corresponding increase in value and place strain on their infrastructure. The bank is evaluating these potential implications to manage the upcoming changes effectively.
