UPI charges from Oct 15: Who pays 0.4% MDR?
The new UPI framework, set to take effect from October 15, 2026, will introduce a Merchant Discount Rate (MDR) for person-to-merchant (P2M) transactions exceeding Rs 2,000. This change comes after two years of deliberation and will apply to approximately 4% of total P2M transactions. The MDR is not a tax or government-imposed charge; instead, it will be distributed among stakeholders in the UPI ecosystem, including banks and payment application providers, to fund infrastructure, innovation, cybersecurity, and customer service.
The revised MDR provisions aim to maintain UPI's affordability while supporting the ecosystem's long-term sustainability.
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