UPI Charges Return for Large Merchant Payments Above ₹2,000
What Happened
The National Payments Corporation of India (NPCI) has fixed the Merchant Discount Rate (MDR) for UPI Person-to-Merchant (P2M) transactions at 0.4% for payments above ₹2,000, with a maximum charge of ₹300 per transaction. The new framework will take effect from October 15, 2026. UPI payments up to ₹2,000 and all Person-to-Person (P2P) transfers will remain free. The MDR will be paid by merchants, not customers.
Key Takeaways
The move aims to create a sustainable revenue model for the UPI ecosystem while keeping most daily transactions unaffected. Only a small share of high-value merchant payments will attract MDR, with special categories such as railways, telecom, insurance and fuel receiving concessional treatment.