UPI charges from October 15: FAQs on who will pay 0.4% MDR and what consumers, small vendors & large merchants need to know
UPI transactions up to Rs 2,000 will remain free for all users. A new Merchant Discount Rate (MDR) will apply to specified merchant payments above Rs 2,000. The revised framework aims to support investment in UPI infrastructure, innovation and cybersecurity. Most person-to-merchant (P2M) transactions will remain unaffected by the changes. The updated provisions will take effect from October 15,…
From October 15, 2026, UPI will introduce a Merchant Discount Rate (MDR) of 0.4% on person-to-merchant (P2M) transactions exceeding Rs 2,000. Nearly 96% of P2M transactions will remain unaffected. Small-value transactions up to Rs 2,000 are not impacted, accounting for over 95% of UPI P2M transactions. The MDR is derived from revenue to support UPI's infrastructure, innovation, cybersecurity, and customer service.
It is lower than traditional card-based MDRs, which can range from 1.5% to 2.5%. The revised framework will take effect on October 15, 2026, allowing time for adjustments to software and billing systems. A dedicated fund aims to subsidize digital payment infrastructure in Tier 3 to Tier 6 centers, as well as support small merchants through financial assistance for merchant onboarding and incentives for UPI transactions.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
