UPI merchant payments above ₹2,000 to carry 0.4% MDR from 15 October 2026
Key facts
- On 15 September 2026, the government set a 0.4% Merchant Discount Rate on some UPI payments.
- It applies to merchant payments above ₹2,000, from 15 October 2026.
- Person-to-person transfers and small merchant payments stay free. Customers pay no charge.
- It ends nearly six years of fully free UPI payments.
Why it matters
[Policy] The government had paid about ₹2,000 crore a year to keep UPI free for merchants. A parliamentary panel said zero MDR strained public finances. Traders and opposition parties have opposed the fee.
Asked before: UPSC Prelims 2018 asked what the term 'Merchant Discount Rate' describes.
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