The National Payments Corporation of India introduced a Merchant Discount Rate charge of 0.4% that large merchants will pay on UPI payments above ₹2,000 per transaction, effective October 15, 2026.
All person-to-person UPI transactions and UPI transactions to small vendors are exempt. Person-to-merchant transactions below ₹2,000 remain free.
The Ministry of Finance said P2P transactions constitute 37% of UPI volume and 70% of value. Only 4% of merchant transactions will be impacted by the MDR introduction.
For high-value transactions of ₹75,000 and above, MDR will be capped at ₹300 per transaction. The commission is shared among payment ecosystem partners including banks and app providers.
Consumers will not pay any MDR, platform fee, or other UPI payment charge.