Archive · 16 Sep 2026
Proposed UPI Fees Above Rs 2,000 Versus Credit Cards
A new rule would make some large UPI payments cost merchants money.
Payments of exactly Rs 2,000 would still have no UPI MDR.
Payments above Rs 2,000 would have a 0.4% charge.
The merchant, not the customer, would pay this charge.
The fee would never be more than Rs 300 for one transaction.
Credit-card payments usually cost merchants more, between 1.5% and 2.5%.
For example, a Rs 10,000 UPI payment would cost the merchant Rs 40, while a credit-card payment could cost Rs 150-Rs 250.
Customers would continue paying the purchase amount shown by the merchant.
Starting October 15, eligible UPI merchant payments above Rs 2,000 will face a 0.4% MDR.
The UPI charge will be paid by merchants, while customers must not be charged extra.
The UPI MDR will be capped at Rs 300, reached at a payment of Rs 75,000.
Credit-card MDR typically ranges from 1.5% to 2.5%, according to the article.
For a Rs 1 lakh payment, UPI would cost Rs 300 versus roughly Rs 1,500-Rs 2,500 by credit card.
- Who
- The National Payments Corporation of India is introducing the proposed framework; merchants would pay the charge and customers would not.
- What
- A 0.4% Merchant Discount Rate would apply to eligible person-to-merchant UPI payments above Rs 2,000, subject to a Rs 300 cap.
- When
- Starting October 15.
- Where
- For eligible UPI person-to-merchant payments in India.
- Why
- The framework would introduce a merchant cost for larger UPI transactions and compares that cost with typical credit-card charges.
- UPI rate
- 0.4% of eligible payments above Rs 2,000
- Threshold
- A payment of exactly Rs 2,000 attracts no MDR
- Maximum UPI fee
- Rs 300 per transaction
- Fee cap reached
- At a payment value of Rs 75,000
- Customer liability
- Customers are not required to pay the MDR
- Credit-card MDR
- Typically about 1.5% to 2.5%, though rates can vary
- Rs 10,000 comparison
- Rs 40 through UPI versus approximately Rs 150-Rs 250 by credit card