New UPI Charges Explained, These 5 Transactions Will Still Remain Free
New Delhi: The government has introduced a new UPI framework , but most users will not have to pay any additional charges. All person-to-person transfers and nearly 96 percent of merchant transactions will remain free. Here are five types of UPI transactions that will continue without any charge- Money Sent To Individuals All person-to-person UPI transfers will remain completely free, regardless…
The government has unveiled a new UPI framework, but most users will not face any extra charges. Over 96 percent of merchant transactions and all person-to-person transfers will remain free, regardless of the amount. This includes sending money to friends, family, or others without incurring any fees.
Receiving money through person-to-person UPI transfers also stays free, making up about 70 percent of the total value of UPI transactions. Customers can continue making UPI payments of up to Rs 2,000 to merchants without charging the Merchant Discount Rate, or MDR.
Small merchants, such as street vendors and neighborhood shops, receiving up to Rs 1 lakh per month via UPI QR codes under the P2PM category will still enjoy zero MDR on every transaction. There is no limit on unlimited personal UPI usage, and individuals won’t have monthly quotas, transaction-volume restrictions, or tiered free limits.
However, a 0.4 percent MDR will be applied to specified merchant transactions over Rs 2,000, capped at Rs 300 for amounts of Rs 75,000 or more. Payments in essential sectors like railways, fuel, insurance, telecommunications, and agricultural inputs will attract a flat MDR of Rs 5. MDR will not be paid by customers, as it will be absorbed within the merchant-payment ecosystem shared among banks, payment providers, and UPI applications.
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