NPCI Announces MDR for UPI; Merchant Transactions Above Rs 2,000 to Attract 0.4% Charge
Consumers will still pay no fee as the revised framework targets selected high-value merchant transactions to help fund UPI infrastructure and expansion.
- On October 15, 2026, the National Payments Corporation of India will implement a 0.4% Merchant Discount Rate on person-to-merchant UPI transactions exceeding ₹2,000, while consumers continue transacting free of cost.
- This framework aims to support infrastructure resilience and cybersecurity investments; crucially, person-to-person transfers and small transactions under ₹2,000 remain entirely free, preserving access for most consumers.
- Essential services like Railways and fuel face a flat ₹5 fee, while stock investments attract 0.02% MDR; all fees remain capped at ₹300 per transaction, limiting merchant burden.
- Finance Minister Nirmala Sitharaman stated most transactions remain unaffected, though the Opposition Congress attacked the notification on Tuesday, alleging it facilitates broader UPI fee implementation.
- Currently accepted in 11 countries, UPI continues its global expansion; a 22-member committee will oversee the framework's evolution, balancing market sustainability with system growth.
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NPCI introduces 0.4% MDR charge on UPI payments above ₹2,000, exempts small merchants, person-to-person transfers
The Ministry of Finance said that person-to-person transactions, which will be exempt, constitute 70% of the value of total UPI transactions. It added that only 4% of UPI transactions at merchants will attract the charge.
UPI Payments New Rule FAQs: Who Pays, How Much and Which Transactions Are Exempt? | 📰 LatestLY
The National Payments Corporation of India (NPCI) has clarified how the new Merchant Discount Rate (MDR) framework will work for UPI transactions above INR 2,000, putting an end to much of the confusion over whether users will have to pay for making high-value digital payments. 📰 UPI Payments New Rule FAQs: Who Pays, How Much and Which Transactions Are Exempt?.
UPI transactions above Rs 2,000 to attract 0.4% MDR, capped at Rs 300
UPI transactions above Rs 2,000 will attract a Merchant Discount Rate (MDR) of 0.4 per cent under a revised framework introduced by the National Payments Corporation of India (NPCI), while consumers will continue to transact free of cost using UPI.
UPI Payments Above Rs 2,000 To Face 0.4% Fee For Merchants; Free For Customers
<p>UPI payments above Rs 2,000 will soon come under a new Merchant Discount Rate (MDR), but customers will not have to pay the charge directly. The National Payments Corporation of India (NPCI) says the new system will apply from October 15, 2026. For customers, sending money through UPI, transferring funds to a bank account and using UPI apps will remain free. The charge will instead apply to eligible merchants, with several exemptions and spec…
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