For merchants, UPI has long had one big advantage over cards: there was no Merchant Discount Rate on standard UPI transactions. That is set to change for certain high-value person-to-merchant payments. Under the proposed framework, a 0.4% MDR will apply to eligible UPI P2M transactions above Rs 2,000, bringing a cost to a payment mode that merchants have so far largely accepted without this charge. At first glance, the new charge may appear significant because it will directly reduce the amount a merchant receives from an eligible transaction. But UPI will still remain cheaper than most debit and credit card payments. The difference becomes particularly visible as the transaction value rises.