Archive · 10 Oct 2026
UPI Apps Won’t Charge Consumers as Merchant MDR Begins
UPI app users will not be charged an extra fee by their apps for making payments.
Starting October 15, some larger payments to merchants will have a fee called MDR.
It applies to merchant payments above ₹2,000 and is set at 0.4%, with a maximum of ₹300.
Merchants are not allowed to make customers pay this fee on top of the displayed price.
A bank executive said customers will keep paying the price shown by the merchant.
RBI Governor Sanjay Malhotra said he did not think the small fee would greatly affect how often people use UPI.
In September, UPI handled fewer transactions and a lower total payment value than in August.
The September totals were 2,407 crore transactions worth ₹29.37 lakh crore.
UPI app providers are not permitted to charge platform fees or other fees for UPI payments.
From October 15, merchant UPI transactions above ₹2,000 will incur an MDR of 0.4%, capped at ₹300.
Merchants accepting UPI cannot pass the MDR charge on to customers, who will continue paying the displayed price.
RBI Governor Sanjay Malhotra said he did not expect a small MDR fee to have a major impact on UPI transaction volumes.
UPI recorded 2,407 crore transactions worth ₹29.37 lakh crore in September, down from August by 1.8% in volume and 1.5% in value.
- Who
- UPI app providers, merchants accepting UPI, consumers, and the Reserve Bank of India.
- What
- A merchant discount rate will apply to certain high-value merchant UPI payments, while consumers cannot be charged the fee by apps or merchants.
- When
- The MDR is scheduled to take effect on October 15; UPI transaction figures cited are for September compared with August.
- Where
- UPI payment transactions.
- Why
- The government has allowed MDR on certain merchant transactions; officials say customers will not pay the charge and the RBI governor expects no major effect on transaction volumes.
- MDR effective date
- October 15
- Transactions covered
- Merchant UPI payments above ₹2,000
- MDR rate
- 0.4%
- MDR cap
- ₹300
- September UPI transactions
- 2,407 crore, compared with 2,450 crore in August
- September UPI transaction value
- ₹29.37 lakh crore, compared with ₹29.82 lakh crore in August
- Monthly change
- Transaction volume fell 1.8% and transaction value fell 1.5% in September compared with August