started · updated
UPI MDR framework to introduce transaction fees above ₹2,000
The National Payments Corporation of India (NPCI) is set to implement a new Merchant Discount Rate (MDR) framework for Unified Payments Interface (UPI) transactions starting October 15, 2026. Under this policy, Person-to-Merchant (P2M) transactions exceeding ₹2,000 will incur a 0.4% fee, capped at ₹300 per transaction. However, essential sectors such as fuel, telecom, and insurance will be subject to a flat ₹5 fee for transactions above the ₹2,000 threshold.
Person-to-person (P2P) transfers and merchant payments below ₹2,000 will remain free of charge. Small merchants with monthly turnovers below ₹1 lakh are also exempt. The Indian government and the Ministry of Finance have stated that the MDR is a merchant-side charge and have advised banks and fintech companies to ensure that these costs are not passed on to consumers.
The announcement has sparked significant debate. Petrol pump dealers in several states, including Rajasthan and Madhya Pradesh, have threatened to stop accepting UPI payments above ₹2,000, citing thin profit margins. Political figures, including members of the Congress party, have criticized the move, alleging it could harm small traders and potentially drive a return to cash transactions. Conversely, the Reserve Bank of India has dismissed fears of a return to cash, describing such concerns as initial hesitation in an established digital ecosystem. Financial analysts, such as Bernstein, have noted that the framework may improve monetization for payment apps like Paytm.
Entities
All India Petroleum Dealers Association · BJP · Bharatiya Janata Party · Congress · Finance Ministry of India · Gaurav Gogoi · India · Indian National Congress · Ministry of Finance · National Payments Corporation of India · P Chidambaram · Parliamentary Standing Committee on Finance
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 3 SOURCES] The central government will not reverse the decision to implement the MDR. thefederal.com
- [DISPUTED] The new MDR rules are scheduled to take effect on October 15. navbharatlive.com · newstodaynet.com · sundayguardianlive.com · www.sentinelassam.com · edtimes.in · +14 more
- [● 27 SOURCES] A 0.4% Merchant Discount Rate (MDR) will apply to UPI merchant transactions exceeding ₹2,000. navbharatlive.com · newstodaynet.com · sundayguardianlive.com · www.sentinelassam.com · edtimes.in · +17 more
- [● 2 SOURCES] Advocate Anjan Datta filed a petition in the Supreme Court challenging the MDR framework. navbharatlive.com
- [● 10 SOURCES] The MDR fee is capped at a maximum of ₹300. sundayguardianlive.com · www.sentinelassam.com · edtimes.in · www.tv9hindi.com · startupsuccessstories.in · +4 more
- [● 2 SOURCES] Merchants must pay an 18% GST on the 0.4% MDR fee, though they can claim input tax credit. thefederal.com
- [● 15 SOURCES] Person-to-person (P2P) transactions and merchant payments up to ₹2,000 will remain free of charge. navbharatlive.com · sundayguardianlive.com · edtimes.in · hindi.webdunia.com · www.tv9hindi.com · +7 more
- [● 2 SOURCES] NITI Aayog Vice Chairman Ashok Lahiri defended the fee, citing the necessity of revenue for government operations. www.agniban.com
- [● 5 SOURCES] The Parliamentary Standing Committee on Finance recommended a tiered revenue model to ensure UPI sustainability. www.news9live.com · navbharatlive.com
- [● 5 SOURCES] The government rejected allegations that the new MDR was introduced due to US pressure. www.socialnews.xyz · morungexpress.com · desitalkchicago.com
- [● 5 SOURCES] Fuel, telecom, and insurance sectors will face a flat ₹5 MDR on transactions above ₹2,000. www.agniban.com · dainiknavajyoti.com · startupsuccessstories.in · edtimes.in · www.therightnews.in