Archive · 25 Sep 2026
UPI MDR To Extend Abroad, But Travellers Won’t Pay Extra
India plans to introduce a new fee for some UPI merchant payments from October 15, 2026.
UPI is a digital payment system used to pay shops and businesses.
The new framework may also apply in 11 countries where UPI works.
However, Indian tourists and students using UPI abroad are not expected to pay an extra charge.
The fee would instead apply to foreign shops and payment partners accepting UPI.
Finance Ministry sources say the change is meant to help support the cost of running UPI.
Indian traders oppose the plan and have announced a “No UPI Day” on October 2.
The government says the fee will not be passed on to customers.
The Indian Banks’ Association reportedly helped determine the rates after discussions with stakeholders.
India’s revised UPI Merchant Discount Rate framework is scheduled to begin on October 15, 2026.
The framework could apply in 11 overseas markets where UPI services currently operate.
Foreign merchants and international acquiring partners, rather than consumers, are expected to bear the levy.
Indian travellers are not expected to pay an additional 0.4% charge when using UPI abroad.
Indian traders plan a “No UPI Day” on October 2 to protest the new merchant charge.
- Who
- The Finance Ministry, Indian traders and business organisations, foreign merchants, international acquiring partners, and UPI users are involved.
- What
- India plans to introduce a revised UPI Merchant Discount Rate framework that may apply domestically and in 11 overseas markets.
- When
- The framework is scheduled to take effect on October 15, 2026; traders plan their protest on October 2.
- Where
- India and 11 overseas UPI markets: the United Arab Emirates, France, Singapore, Bhutan, Nepal, Sri Lanka, Mauritius, Qatar, Cambodia, Greece, and the Maldives.
- Why
- The Finance Ministry says the change is intended to create a more sustainable financial model for the UPI ecosystem.
Merchants and Business Organisations
Government and Finance Officials
Whether MDR should be introduced
Merchants and Business Organisations
Traders and business organisations oppose the new merchant charge and plan to stop accepting UPI payments during the October 2 protest.
Government and Finance Officials
Finance Ministry sources say the revised MDR is needed to create a more sustainable financial model for the UPI ecosystem.
Impact on customers
Merchants and Business Organisations
Merchants’ opposition reflects concern about the effect of adding a charge to UPI merchant payments.
Government and Finance Officials
Nirmala Sitharaman says the charge will not be passed on to customers, and travellers using UPI abroad will not pay the MDR directly.
- Implementation date
- October 15, 2026
- Planned protest
- “No UPI Day” on October 2
- Overseas markets
- 11 countries where UPI services currently operate
- Consumer impact abroad
- Travellers are not expected to pay an additional 0.4% charge for using UPI
- Who pays the levy
- Foreign merchants and international acquiring partners
- Rate-setting body
- The Indian Banks’ Association reportedly determined the rates after stakeholder discussions
- Government position
- Finance Minister Nirmala Sitharaman said the MDR would not be passed on to customers