UPI MDR Overhaul: What the New October 15 Rules Mean for You
Public Lokpal
September 16, 2026
UPI MDR Overhaul: What the New October 15 Rules Mean for You
Starting October 15, the National Payments Corporation of India (NPCI) introduces a revised Merchant Discount Rate framework for UPI transactions exceeding Rs 2,000, setting a standard 0.4% charge capped at Rs 300.
For consumers, digital payments remain entirely free. Surcharges by merchants are strictly illegal, and peer-to-peer transfers are unaffected.
For merchants, small vendors and street-side shops receiving under Rs 1 lakh monthly enjoy zero MDR. However, large retailers, big-box stores, and businesses handling high-value digital transactions above the Rs 2,000 threshold will absorb the 0.4% fee.
Meanwhile, special sectors like fuel, utilities, and mutual funds follow separate flat-rate or discounted caps.
Ultimately, this policy aims to fund robust infrastructure and cybersecurity, ensuring India's digital payment highway stays secure and sustainable without shifting financial burdens onto everyday shoppers or small businesses.