Archive · 15 Sep 2026
UPI Merchant Charges Above Rs 2,000, Consumers Remain Exempt
Some businesses may have to pay a small fee when customers use UPI to make payments above Rs 2,000.
Customers will not pay this fee directly.
For most merchant payments, the fee can be 0.4% and cannot exceed Rs 300.
Certain services, such as fuel and railway tickets, may instead have a charge of up to Rs 5.
Sending money to another person will remain free, even for large amounts.
Small merchants receiving up to Rs 1 lakh per month will not have to pay the new fee.
The money will go to banks and payment-app providers that help operate UPI.
The government says the changes are intended to support the long-term expansion of the payment system.
Certain UPI merchant payments above Rs 2,000 will attract merchant-side charges from October 15.
The standard charge can be 0.4% of the payment, capped at Rs 300 per transaction.
Specified categories such as fuel, railways, telecom, insurance and agricultural inputs may attract a charge of up to Rs 5.
Person-to-person UPI transfers will remain free regardless of transaction value, while payments up to Rs 2,000 to merchants will not be charged.
The government says small merchants receiving up to Rs 1 lakh monthly will be exempt and that charges must not be passed to consumers.
- Who
- The National Payments Corporation of India introduced the revised framework, with charges applying to certain merchants while consumers and person-to-person users remain exempt.
- What
- Certain UPI merchant payments above Rs 2,000 will carry merchant-side interchange charges, generally up to 0.4% and in some categories up to Rs 5.
- When
- The revised framework is scheduled to take effect on October 15.
- Where
- The changes apply to UPI transactions in India.
- Why
- The government says the framework will help banks, payment providers and UPI app providers cover processing costs, sustain operations and expand the system while keeping consumer payments free.
- General threshold
- Certain merchant payments above Rs 2,000 may attract a charge.
- Standard merchant charge
- Up to 0.4%, capped at Rs 300 per transaction.
- Specified categories
- Fuel, railways, telecom services, insurance and agricultural inputs may carry a charge of up to Rs 5.
- Capital markets
- Payments involving mutual funds, securities, stockbrokers and dealers may carry an MDR of 0.02%, capped at Rs 300.
- Consumer payments
- Consumers are not to be charged directly, and payments to merchants up to Rs 2,000 remain free.
- Person-to-person transfers
- All person-to-person UPI transactions remain free regardless of value.
- Small merchants
- The government says merchants receiving up to Rs 1 lakh per month will not pay the new fee.
- Effective date
- The revised framework is scheduled to begin on October 15.
