Most UPI transfers free as MDR applies to merchant payments
Business
Good news if you use UPI for quick money transfers: sending money to friends or family (P2P) will still cost you nothing, no matter the amount.
Even for shopping, 96% of person-to-merchant (P2M) transactions remain fee-free.
The only change? Specified merchant payments above ₹2,000 will now attract MDR, with rates varying by sector and transaction type, but it won't affect most users.
Merchants cannot pass on 0.4% fee
A 0.4% fee will apply only on select high-value merchant payments above ₹2,000, not on regular transfers or most shopping.
Don't worry: you won't be charged as a customer, and merchants can't pass this cost on to you.
The government says these changes help support small businesses joining UPI and keep everyday digital payments free for everyone.