Merchants to now pay fees on UPI transactions above Rs 2,000 from Oct 15
The MDR will be effective from October 15, 2026. . This timeline gives acquiring banks, payment aggregators, fintech applications, and corporate accounting platforms adequate lead time to update their software engines and billing systems.
The National Payments Corporation of India (NPCI) has introduced a Merchant Discount Rate (MDR) of 0.4% for Person-to-Merchant (P2M) UPI transactions exceeding Rs 2,000, starting from October 15, 2026. Person-to-person transactions will continue to be free. Transactions valued at Rs 75,000 and above will have an MDR capped at Rs 300 per transaction.
This new regulation allows businesses sufficient time to adjust their software and billing systems. The MDR fee is charged similarly to other payment methods such as debit cards and credit cards. The decision to impose the MDR aims to maintain UPI's accessibility and convenience while ensuring the long-term sustainability of the ecosystem.
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