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India to implement UPI transaction fees on payments above ₹2,000
Starting October 15, 2026, the Indian government will implement a 0.4% Merchant Discount Rate (MDR) on certain Person-to-Merchant (P2M) UPI transactions exceeding ₹2,000. While transactions up to ₹2,000 and P2P transfers remain free, the new fee applies to sectors such as regular retail, railways, telecom, and insurance. To mitigate impact on low-margin industries, fuel, railways, and telecom sectors will instead face a flat ₹5 charge for transactions above ₹2,000. Additionally, small merchants with monthly UPI revenue under ₹1 lakh are exempt from these charges.
The policy has faced significant backlash. The Madhya Pradesh Petroleum Dealers Association announced that its members will stop accepting UPI payments above ₹2,000 starting October 16, citing the inability to absorb costs due to narrow profit margins. Political leaders, including Maharashtra Navnirman Sena Chief Raj Thackeray, have criticized the move, labeling it a ‘digital trap’ designed to monetize citizens after they became dependent on the digital ecosystem. Critics also expressed concern that merchants might pass these costs onto consumers, despite government assurances that the burden lies with the merchants.
Entities
All India Petroleum Dealers Association · Federation of All India Petroleum Traders · Federation of Gujarat Petroleum Dealers Association · Finance Ministry · Finance Ministry of India · India · Madhya Pradesh Petroleum Dealers Association · Maharashtra Navnirman Sena · National Payments Corporation of India · Petrol Dealers Association of Mumbai · Raj Thackeray · Reserve Bank of India
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 2 SOURCES] Small merchants with monthly UPI QR revenue of up to ₹1 lakh are exempt from the new MDR charges. www.thefinancialworld.com · newsable.asianetnews.com
- [○ 1 SOURCE] Annual operating costs for UPI infrastructure are estimated at ₹20,000 crore, with expected MDR revenue of ₹15,000 crore. www.thefinancialworld.com
- [● 5 SOURCES] Fuel retailers argue they cannot pass MDR costs to consumers because fuel prices are regulated. www.ibtimes.co.in · www.deccanchronicle.com · www.specialcoveragenews.in · kalingatv.com
- [● 2 SOURCES] A viral tool claiming to split large UPI payments into smaller amounts under ₹2,000 has raised concerns regarding potential fraud and MDR avoidance. pragativadi.com · www.dnaindia.com
- [● 6 SOURCES] Petrol pump dealers have threatened to stop accepting UPI payments above ₹2,000 if they are not exempted from the MDR. www.ibtimes.co.in · www.deccanchronicle.com · www.specialcoveragenews.in · kalingatv.com · www.khabarchhe.com
- [● 3 SOURCES] Fuel, railways, telecoms, and insurance sectors will be subject to a flat ₹5 charge for transactions above ₹2,000. www.thefinancialworld.com · www.ibtimes.co.in · newsable.asianetnews.com
- [● 8 SOURCES] Person-to-merchant UPI transactions exceeding ₹2,000 will incur a 0.4% Merchant Discount Rate (MDR) charge starting October 15, 2026. www.thefinancialworld.com · mawphor.com · navbharatlive.com · newsable.asianetnews.com · www.khabarchhe.com · +2 more
- [● 4 SOURCES] Raj Thackeray called the new UPI MDR charges a ‘digital trap’ for merchants and consumers. navbharatlive.com · theshillongtimes.com · yespunjab.com · bhaskarlive.in
- [● 2 SOURCES] Madhya Pradesh petrol pump dealers plan to stop accepting UPI payments above ₹2,000 starting October 16. www.specialcoveragenews.in · kalingatv.com
- [● 4 SOURCES] The MDR for regular merchant payments above ₹2,000 is capped at ₹300 for transactions of ₹75,000 and above. mawphor.com · newsable.asianetnews.com · www.thefinancialworld.com · www.khabarchhe.com