4 hrs ago
New UPI charges clarified: users stay free, merchants pay
The government says people will not have to pay to use UPI.
Sending money to another person will remain free, whether the amount is small or large.
Paying a shop up to ₹2,000 will also stay free for customers.
Some businesses will have to pay a small fee when they receive larger UPI payments.
This fee is called MDR and is paid within the payment system.
Shops should not add this fee to a customer's bill.
Small merchants receiving up to ₹1 lakh per month will remain exempt from MDR.
People can continue making unlimited free UPI payments each month, subject to daily safety limits.
Person-to-person UPI payments will remain free regardless of the amount transferred.
Customers will not pay fees for merchant payments up to ₹2,000.
Starting October 15, certain merchant transactions above ₹2,000 will incur a 0.4% MDR, capped at ₹300 for transactions of ₹75,000 or more.
Small merchants receiving up to ₹1 lakh monthly through eligible UPI QR-code transactions will continue to pay 0% MDR.
Individuals will have unlimited free monthly UPI use, although banks and the NPCI may impose daily transaction limits.
- Who
- UPI users, merchants, banks, payment service providers, UPI app providers, and the government.
- What
- The government clarified that new MDR charges for certain merchant transactions will not be passed on to customers.
- Where
- Across transactions made through the Unified Payments Interface, including person-to-person payments, shops, essential sectors, and financial services.
- When
- The new framework starts October 15; the clarification was issued on Tuesday.
- Why
- To define when MDR applies while keeping UPI free for individuals and protecting eligible small merchants from payment costs.
Key facts
- Person-to-person payments
- Free for any amount.
- Merchant payments up to ₹2,000
- No MDR or customer charge.
- Merchant MDR above ₹2,000
- A 0.4% MDR applies to certain transactions.
- MDR cap
- ₹300 per transaction for transactions of ₹75,000 or more.
- Small merchants
- Those receiving up to ₹1 lakh monthly through eligible UPI QR-code transactions retain 0% MDR.
- Essential sectors
- Railways, telecommunications, insurance, fuel, and agricultural inputs may have a fixed ₹5 MDR above ₹2,000.
- Financial services
- Investment funds, securities, stockbrokers, and financial intermediaries face a 0.02% MDR capped at ₹300.
- Individual usage
- No monthly fees, volume restrictions, or tiered limits, though daily transaction limits may apply.
Sources
Related news
New UPI MDR Rules Keep Consumers Free, Charge Eligible Merchants
UPI Sets 0.4% MDR on High-Value Merchant Payments
UPI Zero-MDR Era Ends With Charges For Higher-Value Payments
UPI Payments Above ₹2,000 Face New Merchant Fee
India Adds UPI Merchant Fees Above ₹2,000
UPI Merchant Charges Above Rs 2,000, Consumers Remain Exempt
New UPI Charges Could Affect Mutual Fund Scheme Costs
Paytm CEO Supports Charges on Large UPI Payments
UPI MDR Charges Back Infrastructure Upgrade, Says TV Mohandas Pai
India’s UPI Fee Reversal Sparks Questions Over Earlier Denial
Swadeshi Jagran Manch Opposes New UPI Merchant Fee
