Mumbai: the country’s largest public sector lender, has announced that eligible small merchants can continue to receive UPI payments through QR codes without paying Merchant Discount Rate (MDR) charges, provided their monthly receipts remain within Rs 1 lakh.
The clarification comes amid discussions surrounding the implementation of MDR on select UPI merchant transactions after Diwali.
Who Is Eligible For Zero MDR?
small merchants receiving payments of up to Rs 1 lakh per month through QR codes can benefit from zero MDR charges.
The facility applies to the specified Person-to-Person Merchant (P2PM) payment category, subject to the bank’s applicable terms and conditions.
This means eligible shopkeepers and small businesses accepting payments within the prescribed monthly limit will not have to bear MDR charges.
Will UPI Customers Pay Any Charges?
SBI has clarified that customers will not be required to pay MDR on UPI transactions.
The bank’s announcement aims to provide clarity to customers and merchants amid concerns about possible transaction charges.
However, the zero-MDR benefit for merchants is subject to eligibility requirements and the applicable payment framework.
What Exactly Is MDR?
Merchant Discount Rate is a fee that payment service providers may charge merchants for accepting digital payments.
The charge is generally linked to the value of transactions processed through payment systems.
For small businesses, such charges can affect operating expenses, particularly when digital transactions account for a significant share of sales.
What Happens After Diwali?
The National Payments Corporation of India (NPCI) recently announced that MDR implementation on select Person-to-Merchant UPI transactions would take place after Diwali.
However, the exact implementation date will be notified separately.
SBI’s clarification provides information about the zero-MDR facility available to eligible small merchants under its stated conditions.
What Should Small Businesses Know?
Small merchants should monitor their monthly QR payment receipts and check whether their transactions qualify for the zero-MDR benefit.
Businesses receiving payments beyond the specified threshold should seek clarification from SBI regarding applicable charges.
Customers, meanwhile, should distinguish merchant-related MDR charges from any other banking or payment service fees.