IndiaPosted at: Sep 16 2026 1:44PM


UPI MDR explained: Will customers be charged from October 15?

New Delhi, Sep 16 (UNI) New rules governing the Merchant Discount Rate (MDR) on certain UPI transactions have raised concerns among users over whether digital payments will become chargeable from October 15, 2026. However, the new framework does not impose any direct charges on consumers for making UPI payments.
The MDR is a fee linked to the merchant side of a digital transaction. It is paid within the payment ecosystem and does not mean that money will be deducted from a customer's bank account when they make a UPI payment.
Person-to-person (P2P) UPI transactions will continue to remain free. Merchant payments of up to Rs 2,000 will also not attract MDR. According to the government, these exemptions mean that around 96 per cent of merchant UPI transactions will remain outside the scope of the new charge.
What is changing from October 15?
Under the revised framework, a standard UPI Person-to-Merchant (P2M) transaction above Rs 2,000 will attract an MDR of 0.4 per cent. The charge is applicable on the merchant side and is paid to the acquiring bank as part of the digital payment ecosystem.
There is also a ceiling on the amount that can be charged. For transactions worth Rs 75,000 or more, MDR will be capped at Rs 300 per transaction.
For example, if a customer makes a Rs 3,000 UPI payment at a merchant, the 0.4 per cent MDR works out to Rs 12. On a Rs 50,000 transaction, the charge would be Rs 200. If the transaction value is Rs 1 lakh, the 0.4 per cent calculation would be Rs 400, but the applicable MDR would be restricted to the Rs 300 cap.
Can merchants recover MDR from customers?
No. The new framework does not permit merchants to pass the MDR directly to customers. The amount payable by the consumer remains the price displayed by the merchant.
The National Payments Corporation of India (NPCI) has also clarified that customers will continue to use UPI without paying a transaction charge. This means users can continue making routine payments through their UPI apps without worrying about the new MDR being deducted from their accounts.
Will sending money to family or to your own account cost more?
No. P2P transactions remain outside the new MDR framework. Therefore, transferring Rs 1 lakh to a family member or moving money between your own bank accounts through UPI will continue to be free.
The new MDR also does not introduce a separate platform fee for consumers. UPI apps cannot levy a new user charge simply because a customer is making a UPI payment under this framework.
What does the new MDR mean for consumers?
For most users, there is no direct change in the cost of making UPI payments. The key change is on the merchant side, particularly for higher-value P2M transactions above Rs 2,000.
In other words, a customer scanning a QR code to pay for a purchase will not see MDR deducted separately from their bank account. The charge is part of the merchant-payment ecosystem rather than a fee imposed on the consumer.
UNI VK RSA
Tags: #UPI MDR explained: Will customers be charged from October 15?
More News

Inaugural Satyarthi Fellowship launched, Dalai Lama sends special message

17 Sep 2026 | 11:49 PM

New Delhi, Sep 17 (UNI) The inaugural cohort of The Satyarthi Fellowship, comprising 25 young changemakers, was launched today during an event in New Delhi.

see more..

PM Modi Thanks Meloni, Tobgay and Tedros for Birthday Wishes, Reaffirms India’s Strategic Partnerships

17 Sep 2026 | 11:39 PM

New Delhi, Sep 17 (UNI) Prime Minister Narendra Modi on Thursday thanked Italian Prime Minister Giorgia Meloni, Bhutanese Prime Minister Tshering Tobgay and World Health Organization Director-General Tedros Adhanom Ghebreyesus for their birthday greetings, using his responses to underline India’s continuing engagement with Italy, Bhutan and the global health community.

see more..

EC freezes TMC name and ‘Flowers & Grass’ symbol for Mamata Banerjee and Arup Roy factions pending final ruling

17 Sep 2026 | 10:56 PM

New Delhi, Sep 17 (UNI) The Election Commission on Thursday barred both rival factions of the All India Trinamool Congress from using the party’s name “All India Trinamool Congress” simpliciter and its reserved “Flowers & Grass” symbol, holding that a formal dispute had emerged between the groups led by Mamata Banerjee and Arup Roy.

see more..

PM Modi thanks Kovind, Naidu & Deve Gowda; reiterates ‘Viksit Bharat’ resolve

17 Sep 2026 | 10:52 PM

New Delhi, Sep 17 (UNI) Prime Minister Narendra Modi today thanked former President Ram Nath Kovind, former Vice President M Venkaiah Naidu and former Prime Minister H D Deve Gowda for their birthday greetings, using his responses to underline his stated emphasis on dignity, opportunity, empowerment and the collective efforts of citizens in building a prosperous and developed India.

see more..

PM Modi's vision placing national interest at heart of governance

17 Sep 2026 | 10:41 PM

New Delhi, Sep 17 (UNI) Delhi Assembly Speaker Vijender Gupta on Thursday said that Prime Minister Narendra Modi's vision of placing the national interest and the welfare of citizens at the heart of governance, has given a new direction and confidence to India’s democratic journey.
Addressing the 69th Commonwealth Parliamentary Conference in Cape Town, South Africa, Gupta highlighted that Modi’s public life represents a journey of dedication, selfless service, commitment to the nation and deep respect for India’s civilizational heritage.

see more..