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

India’s most popular digital payment system, the Unified Payments Interface (UPI), is undergoing a significant backend overhaul from August 1, 2025, as the National Payments Corporation of India (NPCI) introduces a fresh set of rules aimed at making the platform faster, more secure, and less prone to overload during peak hours. The changes, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background.<h2>Daily usage limits for key UPI functions</h2>One of the most significant changes is the introduction of daily limits on UPI-related requests. Starting August 1, users will be able to:<ul><li>Check their account balance only 50 times per day on each UPI app (like PhonePe, Paytm, or Google Pay).</li><li>Fetch linked account information (like listing bank accounts tied to the mobile number) a maximum of 25 times per day.</li><li>Check the status of a pending transaction only 3 times, with a mandatory 90-second gap between each attempt.</li></ul>NPCI believes these limits will help ease the pressure on backend servers, particularly during high-traffic periods, while maintaining smooth functionality for most users. However, to reduce the need for manual balance checks, banks will now be required to display updated balances automatically after each successful transaction.<h2>Scheduled processing for autopay and reversals</h2>Another major change is to UPI autopay, the feature used for subscriptions, SIPs (systematic investment plans), and recurring bill payments. These transactions will now be processed only in three fixed time slots:<ul><li>Before 10 AM</li><li>Between 1 PM and 5 PM</li><li>After 9:30 PM</li></ul>This scheduling is aimed at reducing congestion during peak payment hours (10 AM–1 PM and 5 PM–9:30 PM), when the platform is under maximum load. In addition, payment reversal requests will be capped at 10 per month, with a maximum of 5 allowed per sender.<h2>Stronger oversight, greater transparency</h2>The NPCI will also be closely monitoring how UPI apps and partner banks use critical APIs (application programming interfaces), focusing on their transaction-per-second (TPS) loads and request frequency. Non-compliance could lead to penalties or restricted access.In a welcome move for fraud prevention, users will now see the recipient’s bank name before confirming a transaction, adding another layer of transparency. The reforms come as UPI continues to surge, processing billions of transactions each month. The International Monetary Fund recently praised India’s payment infrastructure as the fastest globally, with UPI playing a central role since its launch in 2016.

The changes made in the Unified Payments Interface, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background.

India’s most popular digital payment system, the Unified Payments Interface (UPI), is undergoing a significant backend overhaul from August 1, 2025, as the National Payments Corporation of India (NPCI) introduces a fresh set of rules aimed at making the platform faster, more secure, and less prone to overload during peak hours. The changes, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background. Daily usage limits for key UPI functions One of the most significant changes is the introduction of daily limits on UPI-related requests. Starting August 1, users will be able to: Check their account balance only 50 times per day on each UPI app (like PhonePe, Paytm, or Google Pay). Fetch linked account information (like listing bank accounts tied to the mobile number) a maximum of 25 times per day. Check the status of a pending transaction only 3 times, with a mandatory 90-second gap between each attempt. NPCI believes these limits will help ease the pressure on backend servers, particularly during high-traffic periods, while maintaining smooth functionality for most users. However, to reduce the need for manual balance checks, banks will now be required to display updated balances automatically after each successful transaction. Scheduled processing for autopay and reversals Another major change is to UPI autopay, the feature used for subscriptions, SIPs (systematic investment plans), and recurring bill payments. These transactions will now be processed only in three fixed time slots: Before 10 AM Between 1 PM and 5 PM After 9:30 PM This scheduling is aimed at reducing congestion during peak payment hours (10 AM–1 PM and 5 PM–9:30 PM), when the platform is under maximum load. In addition, payment reversal requests will be capped at 10 per month, with a maximum of 5 allowed per sender. Stronger oversight, greater transparency The NPCI will also be closely monitoring how UPI apps and partner banks use critical APIs (application programming interfaces), focusing on their transaction-per-second (TPS) loads and request frequency. Non-compliance could lead to penalties or restricted access. In a welcome move for fraud prevention, users will now see the recipient’s bank name before confirming a transaction, adding another layer of transparency. The reforms come as UPI continues to surge, processing billions of transactions each month. The International Monetary Fund recently praised India’s payment infrastructure as the fastest globally, with UPI playing a central role since its launch in 2016.

The changes made in the Unified Payments Interface, although largely invisible to casual users, are expected to streamline how frequently used services such as balance checks, account fetch requests, and auto-debit transactions operate in the background.

UPI set for major revamp from August 1. Here’s what will change

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

UPI set for major revamp from August 1. Here’s what will change