Revised UPI MDR From Oct 15, Over ₹2,000 P2M Payments Charged, Free Under ₹2,000
A revised Merchant Discount Rate framework for UPI payments is set to take effect starting October 15, 2026, applying exclusively to select person-to-merchant commercial transactions. Under the updated framework, transactions up to two thousand rupees, which account for more than ninety-five per cent of UPI volume, will remain completely free of cost for all consumers and merchants. Small merchants earning up to one lakh rupees monthly through QR codes will also continue paying zero MDR. For commercial transactions exceeding two thousand rupees, an MDR of zero point four per cent will apply, capped at three hundred rupees for amounts of seventy-five thousand rupees and above. Specific categories such as railways and fuel will attract a flat five-rupee charge. Individual person-to-person transfers will face no charges. The initiative also establishes a dedicated fund to upgrade digital payment infrastructure across small vendor networks and tier-three markets, ensuring sustainability across the financial ecosystem.
