The government on Tuesday (September 15) announced that Unified Payments Interface (UPI) payments above ₹2,000 will attract a Merchant Discount Rate (MDR) of 0.4 per cent under a revised framework introduced by the National Payments Corporation of India (NPCI). However, consumers will continue to use UPI without paying any charges.&nbsp;The revised framework will come into effect from October 15, 2026, and will apply to selected merchant transactions.&nbsp;Industry data suggests that around 96 per cent of all UPI transactions by volume are below ₹2,000, keeping the vast majority of payments outside the new MDR framework.<h3>What changes for UPI payments above ₹2,000?</h3>Under the new framework, a 0.4 per cent MDR will apply to Person-to-Merchant (P2M) UPI transactions above ₹2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 and above.&nbsp;For example, a 0.4 per cent MDR on a ₹2,000 transaction would amount to ₹8. However, this is a merchant-side charge and does not mean consumers will have to pay a fee when making UPI payments.&nbsp;Person-to-Person (P2P) transactions will remain outside the MDR framework. P2M transactions of up to ₹2,000 will also continue to remain free of MDR.&nbsp;Small merchants covered under the Person-to-Person Merchant (P2PM) framework will also continue to get zero MDR. This category includes small vendors receiving up to ₹1 lakh per month through UPI QR payments directly into their bank accounts.&nbsp;Also Read: <a href="https://www.wionews.com/india-news/surrendering-to-american-pressure-rahul-gandhi-targets-pm-modi-govt-over-upi-charges-1789476200880">‘Surrendering to American pressure’: Rahul Gandhi targets PM Modi govt over UPI charges</a><h3>Special charges for some services</h3>NPCI has also set a flat MDR of ₹5 per transaction for certain merchant categories. These include railways, telecom services, insurance and fuel.&nbsp;The ₹5 charge will apply to UPI payments above ₹2,000 in these specified categories.&nbsp;The revised framework also proposes a dedicated fund to support digital payment infrastructure for existing small merchants and businesses in Tier 3 and smaller markets.&nbsp;NPCI said there would be no impact on small-value UPI transactions of up to ₹2,000 for merchants. Such transactions account for more than 95 per cent of all UPI P2M transactions.<h3>Why has NPCI revised the MDR framework?</h3>The new framework is aimed at expanding UPI acceptance and encouraging its continued use among merchants. It also seeks to bring more small businesses into India's digital payments ecosystem.&nbsp;According to NPCI, the MDR collected on high-value transactions will be distributed among different players in the UPI ecosystem. The funds will help support the expansion of UPI to new users and merchants, along with investments in resilience, cybersecurity and innovation.&nbsp;NPCI also said the revised UPI MDR remains lower than the charges linked to several other digital payment methods, including credit cards, debit cards and wallets.

UPI merchant transactions above ₹2,000 will attract a 0.4 per cent MDR from October 15, while consumers will continue to make UPI payments without paying any direct charges.

The government on Tuesday (September 15) announced that Unified Payments Interface (UPI) payments above ₹2,000 will attract a Merchant Discount Rate (MDR) of 0.4 per cent under a revised framework introduced by the National Payments Corporation of India (NPCI). However, consumers will continue to use UPI without paying any charges. The revised framework will come into effect from October 15, 2026, and will apply to selected merchant transactions. Industry data suggests that around 96 per cent of all UPI transactions by volume are below ₹2,000, keeping the vast majority of payments outside the new MDR framework. What changes for UPI payments above ₹2,000? Under the new framework, a 0.4 per cent MDR will apply to Person-to-Merchant (P2M) UPI transactions above ₹2,000. The charge will be capped at Rs 300 for transactions of Rs 75,000 and above. For example, a 0.4 per cent MDR on a ₹2,000 transaction would amount to ₹8. However, this is a merchant-side charge and does not mean consumers will have to pay a fee when making UPI payments. Person-to-Person (P2P) transactions will remain outside the MDR framework. P2M transactions of up to ₹2,000 will also continue to remain free of MDR. Small merchants covered under the Person-to-Person Merchant (P2PM) framework will also continue to get zero MDR. This category includes small vendors receiving up to ₹1 lakh per month through UPI QR payments directly into their bank accounts. Also Read: ‘Surrendering to American pressure’: Rahul Gandhi targets PM Modi govt over UPI charges Special charges for some services NPCI has also set a flat MDR of ₹5 per transaction for certain merchant categories. These include railways, telecom services, insurance and fuel. The ₹5 charge will apply to UPI payments above ₹2,000 in these specified categories. The revised framework also proposes a dedicated fund to support digital payment infrastructure for existing small merchants and businesses in Tier 3 and smaller markets. NPCI said there would be no impact on small-value UPI transactions of up to ₹2,000 for merchants. Such transactions account for more than 95 per cent of all UPI P2M transactions. Why has NPCI revised the MDR framework? The new framework is aimed at expanding UPI acceptance and encouraging its continued use among merchants. It also seeks to bring more small businesses into India's digital payments ecosystem. According to NPCI, the MDR collected on high-value transactions will be distributed among different players in the UPI ecosystem. The funds will help support the expansion of UPI to new users and merchants, along with investments in resilience, cybersecurity and innovation. NPCI also said the revised UPI MDR remains lower than the charges linked to several other digital payment methods, including credit cards, debit cards and wallets.

UPI merchant transactions above ₹2,000 will attract a 0.4 per cent MDR from October 15, while consumers will continue to make UPI payments without paying any direct charges.

UPI rule change: 0.4% MDR on merchant payments above ₹2,000; consumers unaffected

Indian government on Monday (September 14) notified changes in its payments legislation, specifying that banks cannot charge fees on payments ​via Unified Payments Interface (UPI) transactions of up to 2,000 ‌rupees ($20.93) and RuPay debit cards. The announcement of legislation changed the earlier provision preventing banks from charging fees on digital payments using the popular UPI platform, paving the way ​for charges to be imposed on larger transfers. The government has issued the notification under Section 10A of the Payment and Settlement Systems Act, 2007. “In exercise of the powers conferred by Section 10A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government hereby specifies the following electronic modes of payment, namely: (i) Debit Card powered by RuPay; and (ii) Unified Payments Interface (UPI) transactions up to Rs. 2,000,” the Ministry of Finance said.&nbsp;Also read: <a href="https://www.wionews.com/india-news/now-trump-is-copying-us-shivakumar-links-us-5-000-plan-to-congress-guarantees-1789410350683">'Now Trump is copying us': Shivakumar links US $5,000 plan to Congress guarantees &nbsp;</a> “No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment by using the electronic modes of payment specified in the paragraph above,” it added. The notification ensures that UPI transactions up to Rs 2,000 continue to remain free of any charges, while opening the door for a possible small Merchant Discount Rate (MDR) to be levied on select UPI merchant transactions above a certain threshold. Meanwhile, reports suggest that merchant fees ​on larger ⁠UPI transactions could generate 50 billion rupees to 100 billion rupees annually for the payments ​industry.

The notification ensures that UPI transactions up to Rs 2,000 continue to remain free of any charges, while opening the door for a possible small Merchant Discount Rate (MDR) to be levied on select UPI merchant transactions above a certain threshold.

Indian government on Monday (September 14) notified changes in its payments legislation, specifying that banks cannot charge fees on payments via Unified Payments Interface (UPI) transactions of up to 2,000 ‌rupees ($20.93) and RuPay debit cards. The announcement of legislation changed the earlier provision preventing banks from charging fees on digital payments using the popular UPI platform, paving the way for charges to be imposed on larger transfers. The government has issued the notification under Section 10A of the Payment and Settlement Systems Act, 2007. “In exercise of the powers conferred by Section 10A of the Payment and Settlement Systems Act, 2007 (51 of 2007), the Central Government hereby specifies the following electronic modes of payment, namely: (i) Debit Card powered by RuPay; and (ii) Unified Payments Interface (UPI) transactions up to Rs. 2,000,” the Ministry of Finance said. Also read: 'Now Trump is copying us': Shivakumar links US $5,000 plan to Congress guarantees “No bank or system provider shall impose, whether directly or indirectly, any charge upon a person making or receiving a payment by using the electronic modes of payment specified in the paragraph above,” it added. The notification ensures that UPI transactions up to Rs 2,000 continue to remain free of any charges, while opening the door for a possible small Merchant Discount Rate (MDR) to be levied on select UPI merchant transactions above a certain threshold. Meanwhile, reports suggest that merchant fees on larger ⁠UPI transactions could generate 50 billion rupees to 100 billion rupees annually for the payments industry.

The notification ensures that UPI transactions up to Rs 2,000 continue to remain free of any charges, while opening the door for a possible small Merchant Discount Rate (MDR) to be levied on select UPI merchant transactions above a certain threshold.

UPI payments up to Rs 2,000 to stays free, but bigger transactions may soon cost you: Govt

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UPI rule change: 0.4% MDR on merchant payments above ₹2,000; consumers unaffected

UPI payments up to Rs 2,000 to stays free, but bigger transactions may soon cost