Archive · 16 Sep 2026
UPI MDR Plan Lifts ATM-Related Stocks as Merchants Face Fees
India plans to start charging some merchants for using UPI payments.
The fee will be 0.4% for person-to-merchant transactions above Rs 2,000.
The rule is scheduled to begin on October 15, 2026.
Customers will not directly pay this fee.
Instead, merchants will pay it.
The fee will not exceed Rs 300 for transactions of Rs 75,000 or more.
Person-to-person transfers will remain free.
Shares of some ATM and cash-management companies rose after the announcement.
NPCI said businesses have time to update their computer systems before the rule begins.
A 0.4% merchant discount rate will apply to P2M UPI transactions above Rs 2,000 from October 15, 2026.
The charge will be capped at Rs 300 for transactions worth Rs 75,000 or more.
Merchants, rather than consumers, will pay the MDR, while P2P UPI transfers will remain free.
CMS Info Systems, Radiant Cash Management and SIS Ltd shares rose after the announcement but later pared gains.
NPCI said the implementation timeline would allow payment and accounting platforms to update their systems.
- Who
- The National Payments Corporation of India announced the framework; merchants will pay the fee, while payment and cash-management companies may be affected.
- What
- A 0.4% MDR will be charged on person-to-merchant UPI transactions above Rs 2,000, with specified exclusions.
- When
- The MDR is scheduled to take effect on October 15, 2026; the article also cites UPI data for August.
- Where
- The policy applies to UPI transactions in India.
- Why
- NPCI said the timeline is intended to give banks, payment aggregators, fintech applications and corporate accounting platforms time to update their software and billing systems.
- MDR rate
- 0.4% for eligible P2M UPI transactions above Rs 2,000
- Effective date
- October 15, 2026
- Maximum charge
- Rs 300 for transactions of Rs 75,000 and above
- Who pays
- Merchants, not consumers
- P2P transfers
- Person-to-person UPI transfers remain free
- August UPI volume
- 2,450 crore transactions worth Rs 29.82 lakh crore
- UPI market share
- 84% of India's digital payments by volume and 49% of global real-time payment volumes