New Delhi. National Payments Corporation of India (NPCI) has made an important announcement on Tuesday. Merchant Discount Rate (MDR) will now be applicable on select person-to-merchant (P2M) UPI transactions from October 15. Under this, merchants will have to pay 0.4% charge on transactions above Rs 2,000 and the maximum charge will be Rs 300 for payments of Rs 75,000 or more.
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Actually, a notification was issued by the government on Monday. Since this notification, there were speculations that a charge could be imposed on transactions of more than Rs 2000. At the same time, now it has been approved. This new framework is aimed at creating a more sustainable commercial model for the UPI ecosystem. The proceeds will be used to invest in payments infrastructure. Besides, it will also help in improving cyber security, innovation and customer service. This step will further strengthen digital transactions.
Regarding Merchant Discount Rate (MDR) on Select UPI (P2M) Transactions
Please refer to the FAQs here: pic.twitter.com/4HMU0YZ2AC
— NPCI (@NPCI_NPCI) September 15, 2026
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At the same time, this new rule will have a direct impact on those merchants who accept UPI transactions of more than Rs 2,000. They will have to pay a fee of 0.4 percent on each such transaction. However, for large payments of more than Rs 75,000, the fee will be limited to Rs 300. This fee will be a new cost for merchants. Its objective is to make the UPI system self-reliant.