Guwahati: The National Payments Corporation of India (NPCI) is set to introduce a revised Merchant Discount Rate (MDR) framework for selected person-to-merchant (P2M) UPI transactions from 15th October 2026, raising questions over whether consumers will have to pay additional charges.
Under the new framework, a 0.4% MDR will apply to eligible P2M UPI transactions above Rs 2,000, with the charge capped at Rs 300 for transactions exceeding Rs 75,000. However, the government and NPCI have clarified that the MDR will be paid by merchants, and consumers will not be charged.
UPI transactions below Rs 2,000 will continue without MDR. Personal transactions, including money transfers to family and friends, bill splitting and transfers between one’s own linked bank accounts, will also remain free regardless of the amount.
Small merchants receiving up to Rs 1 lakh a month through UPI QR codes will be exempt from MDR. However, merchants exceeding that threshold for three consecutive months will come under the new framework.
Meanwhile, Railways, telecom, insurance, fuel and agricultural-input transactions above Rs 2,000 will attract a flat MDR of Rs 5 per transaction.
NPCI has reiterated that consumers can continue using UPI free of charge.