New UPI merchant charges will come into effect from October 15, 2026. The National Payments Corporation of India (NPCI) has set a new Merchant Discount Rate (MDR) for certain payments made to businesses. The new rules will mainly affect merchant transactions above ₹2,000.
UPI Charges for Payments Above ₹2,000
Under the new rules, eligible merchant payments above ₹2,000 will attract an MDR of 0.40 percent. The charge will apply to the merchant side of the transaction.
For example, a ₹2,000 payment will attract an MDR of ₹4. A ₹3,000 payment will carry a ₹12 charge. Similarly, a ₹50,000 payment will attract ₹200. Payments of ₹75,000 or more will have a maximum MDR of ₹300 under the stated cap.
However, small businesses will get an exemption in certain cases. NPCI said small merchants who receive up to ₹1 lakh per month directly into a bank account through a QR code will not have to pay the MDR.
Fixed ₹5 Charge for Some Services
The new UPI charges will also cover certain specific sectors. These include railway services, telecom services, insurance and fuel payments involving petrol and diesel.
For transactions above ₹2,000 in these categories, a fixed MDR of ₹5 will apply to each transaction.
Meanwhile, other eligible merchant transactions above ₹2,000 will face the 0.40 percent MDR. This structure will create different charges based on the type of service and transaction.
Lower MDR for Financial Services
NPCI has also set a lower MDR rate for some financial services. Mutual funds, securities, stock brokers and dealers will attract an MDR of 0.02 percent under the new structure.
The lower rate reflects the different payment and service structure in financial transactions.
What the New UPI Charges Mean
The new UPI charges mainly affect merchant payments. They do not mean that users will pay a separate fee every time they make a UPI payment.
The MDR is a charge within the merchant payment system. Businesses and payment service providers will need to follow the new rules from October 15.
At the same time, the exemption for small QR-code merchants aims to protect small businesses from additional costs. This could help many small shops and local businesses continue accepting digital payments without paying MDR.
UPI has become a major part of India’s digital payment system. Therefore, any change in its fee structure can affect millions of merchants and customers.
The new rules will create different MDR rates based on transaction value and business category. As a result, merchants should check the applicable rate before the new system takes effect.
