What happens to refunds on UPI payments above ₹2,000 when MDR rules kick in?

When new Merchant Discount Rate (MDR) rules take effect on UPI payments above ₹2,000, customers will still receive full refunds for cancelled orders, as merchants cannot deduct processing fees. However, sellers may have to absorb the 0.4% processing charge even after refunding the customer. Notably, merchants cannot pass on MDR charges to customers when accepting UPI payments.