New Delhi. 0.4% Merchant Discount Rate i.e. MDR will be applicable on some big merchant payments of UPI in the country from October 15, 2026. This change has been made under the new framework of the National Payments Corporation of India and has been endorsed by the RBI for the long-term sustainability of UPI.
Read :- Earlier UPI payment was completely free, but this was not seen by PM Modi and he started the game of extortion here also: Supriya Shrinet.
Understand what the whole matter is?
If you pay up to ₹2,000 through UPI to any shop, website or business, MDR will not be levied on it. But 0.4% MDR will be applicable on eligible Person-to-Merchant i.e. P2M transactions of more than ₹2,000. For example, if a merchant receives an eligible UPI payment of ₹10,000, the MDR @ 0.4% will be ₹40. On payment of ₹50,000 this amount will be ₹200. And on transactions of ₹75,000 or more, the maximum limit of MDR will be ₹300 per transaction.
the most important thing
This MDR is not for taking from the customer. According to the government, MDR is imposed within the merchant payment ecosystem. Banks have been advised to ensure that the merchant does not pass this on to the customer. Let us tell you that UPI apps are also not allowed to charge hidden or platform fees under this framework. So now if you send money through UPI to your friend, family or any other person, there is relief here too. Person-to-Person i.e. P2P UPI transactions will be free for any amount. That means, be it ₹500, ₹5,000 or ₹50,000. MDR will not be charged on UPI transfer between person to person. Apart from this, separate relief has also been given for small shopkeepers. Eligible small merchants receiving up to ₹1 lakh per month through UPI QR have been placed in the zero-MDR framework. According to government data, about 96% merchant transactions will not be affected by this change.
Read :- Modi government quietly opened the way for imposing fees on UPI: Rahul Gandhi
Apart from this, there is a provision of flat ₹5 MDR for eligible transactions above ₹2,000 in some essential sectors like railways, telecom, insurance, fuel and agricultural inputs. 0.02% MDR, up to a maximum of ₹300, will be applicable on certain capital market related payments. So overall UPI is now completely paid. The real change is that from October 15, MDR will be applicable on some large merchant transactions, while P2P payments and most small merchant payments will remain free. RBI says that the objective of this arrangement is to scale UPI further, maintain investment in technology and infrastructure and make the digital payment ecosystem sustainable in the long run.
So from now on, while making UPI payment, do not panic just seeing the limit of ₹ 2,000. First of all see whether the payment is going to the person or the merchant. Because UPI has not been stopped, but the rules of big merchant payments are definitely going to change.