Archive · 15 Sep 2026
UPI Fuel Payments Above ₹2,000 to Attract Flat ₹5 Fee
UPI payments are changing for some large purchases.
If you pay more than ₹2,000 for fuel using UPI, a flat ₹5 processing charge will apply.
Fuel payments below ₹2,000 will remain free.
Petrol pump operators will not have to pay this MDR charge.
Insurance payments above ₹2,000 will also have a ₹5 charge.
Sending money directly to another person through UPI will remain free.
Merchant payments up to ₹2,000 will also remain free.
The new rules replace the zero-MDR system for certain larger merchant payments.
Fuel purchases above ₹2,000 made through UPI at petrol stations will attract a flat ₹5 merchant discount rate.
Fuel payments below ₹2,000 will continue to have zero MDR.
Petrol pump operators will not directly face MDR on these UPI transactions.
Insurance premium payments above ₹2,000 will also carry a flat ₹5 MDR.
Person-to-person UPI payments will remain free, while about 96% of person-to-merchant transactions will remain unaffected.
- Who
- The National Payments Corporation of India announced the charges, with the Finance Ministry describing the broader framework.
- What
- UPI fuel payments above ₹2,000 will attract a flat ₹5 MDR, while smaller fuel payments remain free.
- When
- The article does not specify when the revised charges take effect.
- Where
- At petrol stations for fuel purchases made through UPI.
- Why
- The flat fee is intended to avoid high processing costs on larger fuel transactions and replace the previous zero-MDR framework for specified merchant payments.
Zero-MDR Approach
Differentiated-MDR Approach
How UPI payments should be funded
Zero-MDR Approach
The zero-MDR system was introduced to encourage digital payments and kept covered transactions free, but banks and fintech companies criticized it as unsustainable.
Differentiated-MDR Approach
The new framework introduces category-based charges for specified merchant payments above ₹2,000 while keeping person-to-person payments and many smaller transactions free.
Impact on fuel transactions
Zero-MDR Approach
Under the previous zero-MDR arrangement, eligible fuel transactions did not attract the new flat fee.
Differentiated-MDR Approach
The National Payments Corporation of India says a flat ₹5 fee on fuel payments above ₹2,000 protects petrol pump operators from high processing fees.
- Fuel payments above ₹2,000
- Flat ₹5 MDR per transaction
- Fuel payments below ₹2,000
- Zero MDR
- Fuel station operators
- Will not face MDR on these transactions
- Insurance premiums above ₹2,000
- Flat ₹5 MDR per transaction
- Person-to-person UPI payments
- Remain free regardless of amount
- Merchant payments up to ₹2,000
- Remain free
- Unaffected person-to-merchant transactions
- Approximately 96%