UPI merchant payments above Rs 2,000 to attract MDR from October 2026
NPCI’s reported framework would levy 0.4% MDR on person-to-merchant UPI payments above Rs 2,000, while preserving zero fees for consumers, P2P transfers and eligible micro-merchants. Essential-service categories would face a Rs 5 flat fee.
What happened
NPCI says merchants will pay 0.4% MDR on UPI P2M payments above Rs 2,000 from October 15, 2026, with exemptions and concessional rates for micro-merchants and
Key facts
- 0.4% MDR on P2M UPI transactions above Rs 2,000
- Rs 300 MDR cap for transactions of Rs 75,000 and above
- Rs 5 flat MDR for specified categories including railways, telecom, insurance, fuel and utilities above Rs 2,000
- 0.02% MDR for capital-market transactions, capped at Rs 300
- Zero MDR for P2PM micro-merchants receiving up to Rs 1 lakh monthly
What changed
NPCI says merchants will pay 0.4% MDR on UPI P2M payments above Rs 2,000 from October 15, 2026, with exemptions and concessional rates for micro-merchants and essential-service categories. Consumers and P2P payments remain free.
Why this matters
Prepare for a reported October 2026 MDR on UPI merchant payments above Rs 2,000 by modeling margin impact, renegotiating acquirer terms and defining any compliant customer pass-through policy.
What to watch
- NPCI circular, RBI clarification or gazette notification confirming scope, effective date, merchant eligibility and treatment of GST on MDR.
- Definition of essential-service categories and confirmation of the Rs 5 flat-fee mechanics.
- Rules on merchant pass-through, convenience fees, cash discounts and price differentiation by payment method.
- Acquirer, bank, QR-provider and payment-aggregator pricing announcements.
- UPI payment mix changes above and below the Rs 2,000 threshold, including evidence of transaction splitting.