Archive · 18 Sep 2026
New UPI MDR rules set flat ₹5 charges for services
Starting October 15, some businesses will have to pay a small fee when customers pay them through UPI.
The fee will be ₹5 for payments above ₹2,000 in areas such as fuel, railway tickets, telecom, insurance and agricultural inputs.
This fee is charged to the merchant, not added to the customer’s bill.
For other large merchant payments, the fee will be 0.4%.
That fee cannot be more than ₹300 for a single transaction.
Payments of ₹2,000 or less will not be affected.
Small vendors receiving up to ₹1 lakh each month through UPI QR codes will still pay no MDR.
NPCI says the rules are intended to support digital payments while keeping everyday transactions affordable.
From October 15, selected UPI merchant transactions above ₹2,000 will attract new MDR charges.
Fuel, railway tickets, telecommunications, insurance and agricultural inputs will face a flat ₹5 MDR.
Other P2M UPI transactions above ₹2,000 will carry a 0.4% MDR, capped at ₹300.
Customers are not supposed to pay the MDR separately; banks have been advised to prevent merchants from passing it on.
Small merchants receiving up to ₹1 lakh monthly through UPI QR codes will continue under zero MDR.
- Who
- The National Payments Corporation of India announced the new framework for merchants, banks and UPI payment participants.
- What
- New MDR charges will apply to selected UPI Person-to-Merchant transactions above ₹2,000.
- When
- The new rates will take effect on October 15 this year.
- Where
- The rules apply to UPI merchant payments, including payments for fuel, railway tickets, telecommunications, insurance and agricultural inputs.
- Why
- NPCI says the framework is intended to prevent cost increases in essential services and support the long-term sustainability of digital payments.
- Effective date
- October 15 this year
- Flat MDR sectors
- Fuel, railway tickets, telecommunications, insurance and agricultural inputs
- Flat charge
- ₹5 for specified merchant transactions above ₹2,000
- Standard charge
- 0.4% for other P2M UPI transactions above ₹2,000
- MDR cap
- ₹300 for transactions of ₹75,000 and above
- Small merchants
- Vendors receiving up to ₹1 lakh per month through UPI QR codes remain under zero MDR
- Small-value payments
- Transactions up to ₹2,000 remain unaffected