Insurance payments face flat ₹5 fee despite UPI 0.4% MDR
Business
From October 15, 2026, UPI payments over ₹2,000 will have a new 0.4% merchant discount rate (MDR).
But if you're paying your insurance premium through UPI, you're in luck: insurance payments above ₹2,000 have a flat ₹5 fee per payment.
Merchant bears ₹5 fee per payment
That ₹5 fee isn't added to your bill; the cost is borne on the merchant side, so you just pay your regular premium.
This move keeps digital insurance payments affordable and hassle-free (even on big amounts) and puts insurance in the same low-fee club as categories like fuel, railways and some utility payments.