Question 1

Q1: When will UPI Charges start?

Accepted Answer

The new MDR framework is scheduled to apply from October 15, 2026. These UPI Charges relate to specified merchant transactions under the announced framework.

Question 2

Q2: Will I have to pay a UPI fee?

Accepted Answer

No direct UPI transaction fee is being introduced for consumers under the announced framework. The new UPI Charges primarily concern MDR within the merchant payment ecosystem.

Question 3

Q3: Will sending money to friends cost money?

Accepted Answer

No. Person-to-person UPI payments will remain free regardless of the amount.

Question 4

Q4: What is the UPI MDR rate?

Accepted Answer

The standard MDR for specified merchant transactions above ₹2,000 is 0.4%, subject to a ₹300 cap for transactions of ₹75,000 and above.

Question 5

Q5: Will UPI payments below ₹2,000 remain free?

Accepted Answer

Yes. Merchant payments up to ₹2,000 will continue with zero MDR.

Question 6

Q6: What happens to fuel and insurance payments?

Accepted Answer

Eligible transactions above ₹2,000 in specified sectors such as fuel and insurance will have a flat ₹5 MDR.

Question 7

Q7: Will small shops have to pay MDR?

Accepted Answer

Eligible small merchants under the zero-MDR framework will continue to receive payments without MDR, subject to the applicable conditions.

Question 8

Q8: Is UPI MDR a tax?

Accepted Answer

No. The government says MDR is a payment ecosystem charge and is not a tax collected by the government or NPCI.

Question 9

Q9: Will these UPI Charges affect every UPI payment?

Accepted Answer

No. The announced framework distinguishes between P2P payments, merchant payments, transaction values, merchant categories and specific sectors.

Question 10

Q10: Will customers directly pay the new MDR?

Accepted Answer

The announced framework does not provide for the MDR to be separately passed on to consumers as a UPI transaction fee.

UPI

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