A major change in digital payments is set to take effect from October 15, with a Merchant Discount Rate (MDR) of 0.40% applicable to certain UPI transactions above ₹2,000. However, railway ticket payments will be treated differently from regular merchant transactions.
Railways will be included in the category of essential services along with sectors such as utilities, fuel, telecom and insurance. For train ticket payments above ₹2,000 made through UPI, a fixed MDR of ₹5 will apply instead of the percentage-based charge used for regular merchant transactions.
This has raised an important question among passengers: Will the ₹5 charge be added to the train ticket price, or will it be paid by IRCTC and the Railways?
Will Passengers Have to Pay the ₹5 MDR?
Passengers will not have to pay an additional ₹5 on qualifying train ticket bookings. Under the stated MDR rules, the charge is borne by the merchant or service provider rather than being passed on to the customer.
For example, if a passenger books a train ticket worth ₹3,000 through UPI on the IRCTC platform, ₹3,000 will be deducted from the passenger’s bank account. The payment will not become ₹3,005 because of the MDR.
The applicable cost will instead be handled by the merchant side, involving the Railways/IRCTC and the banking ecosystem.
How Will the New MDR Structure Work?
The revised arrangement distinguishes railway payments from ordinary retail transactions. For regular merchant payments above ₹2,000, MDR can be charged at up to 0.40%.
Railway ticket payments, however, will come under the essential-services category. For qualifying transactions above ₹2,000, the applicable MDR will be a fixed ₹5, irrespective of whether the ticket costs slightly more than ₹2,000 or substantially more.
Therefore, a few key points emerge from the new structure. Rail tickets will not have the regular percentage-based MDR, while qualifying UPI transactions at other merchants may attract MDR of up to 0.40%. For railway transactions above ₹2,000, the fixed charge will remain ₹5.
₹5 Charge Could Add Up to Crores
Although ₹5 may seem like a very small amount for an individual transaction, the impact can become significant when applied across the massive volume of railway bookings made every day.
According to railway estimates cited in the article, if approximately 1 lakh train tickets costing more than ₹2,000 are booked through UPI each day, the resulting MDR would amount to around ₹5 lakh per day.
If the same volume continues for an entire year, the amount could reach approximately ₹18.25 crore.
For passengers, however, the key point remains that this MDR is not expected to be added separately to the price they pay for the qualifying train ticket.
Disclaimer: This article is provided for general informational purposes. Payment rules, MDR rates and applicable terms may change based on regulatory decisions or updates from the relevant authorities. Passengers should check the latest information available from IRCTC, Indian Railways, banks or other authorised sources before making a payment.