UPI Payment Charges: Nowadays, UPI payments are used everywhere—from small shops to large showrooms. The prospect of charges on UPI transactions has caused concern, especially with reports suggesting a 0.4% Merchant Discount Rate (MDR) fee on payments exceeding ₹2,000. It is important to clarify that this MDR fee will not be charged to customers. Furthermore, it will not apply to merchants under certain conditions. The MDR should not be viewed as an additional, direct charge on a customer’s UPI payment.

An official UPI social media platform has released a video to raise awareness among customers and merchants. The video clearly explains the thresholds under which the MDR will not be applied to merchants, as well as how these changes might—or might not—affect customers.

What is the status of the new UPI rules?
Initially, a 0.4% MDR fee on UPI payments for large merchants was scheduled to take effect by October 15. However, the implementation has been deferred due to the festive season. The rule is now expected to be announced after Diwali, and a new date may be declared. As of now, there has been no official announcement regarding the implementation of these new UPI rules.

“>November 6, 2026

Rules for customers
The government has clarified that customers will not be required to pay any MDR charges. Additionally, UPI transactions made to friends, relatives, or family members remain free of charge. Similarly, when a customer makes a payment to a shopkeeper, the customer does not have to pay any fees in the form of an MDR.

Rules for merchants
There are new rules for merchants regarding UPI payments. Merchants will not be charged an MDR for payments up to ₹2,000. However, for payments exceeding ₹2,000, merchants will be required to pay a 0.4% MDR fee. This includes both small and large shopkeepers. The higher the payment amount, the higher the MDR charge will be.