LatestCorporate Compliance 22 September 2026
Will UPI Salary Payments Trigger MDR Charges?
A recent Moneycontrol analysis examines whether salary payouts made via UPI will fall under the merchant discount rate (MDR) regime. It notes that while the Wage Code treats wages as exempt, the RBI’s definition of merchant transactions could bring UPI salary credits into MDR liability, prompting employers to reassess cost implications.
The recent discussion around UPI salary transfers raises the question of whether they will be subject to merchant discount rates (MDR).
- Current stance: The Wage Code classifies wages as non‑merchant transactions, implying no MDR.
- Regulatory risk: RBI may interpret UPI‑based salary credits as commercial payments, potentially attracting MDR.
- Employer impact: If MDR applies, companies could face additional processing costs on payroll.
For a deeper dive, see the Moneycontrol article.
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