What happens when ₹10,000 payment is split into 5 transactions to avoid MDR?

Splitting a ₹10,000 payment into five ₹2,000 transactions to avoid MDR is an emerging practice known as transaction splitting. "Splitting creates unnecessary inconvenience and may complicate reconciliation, cancellations or refunds for merchants," Nirav Shah, MD at BFSI at Equirus Capital, said. The government has imposed a 0.4% charge on UPI payments above ₹2,000 to shops and businesses.