India to introduce MDR on merchant UPI payments over ₹2,000
Starting October 15, 2026, the Indian government will introduce a Merchant Discount Rate (MDR) on UPI payments over ₹2,000 made to merchants.
But do not worry, regular person-to-person (P2P) transfers and most everyday transactions will still be free for users.
The MDR is a merchant-side charge that merchants pay when they accept UPI payments.
Finance Ministry says consumers unaffected
The Finance Ministry says this new MDR will not affect consumers at all. Merchants and UPI apps are not allowed to pass these charges on to you, so your usual payments stay free.
Even bigger merchant payments have a cap: the MDR will not go over ₹300 for transactions of ₹75,000 or more.
And if you are an NRI sending money home using UPI, there are no extra fees either. Your regular transfers remain charge-free.