Government Introduces UPI Merchant Charges on High-Value Transactions Above Rs 2,000

16 Sept 2026, 6:34 pm · 3h ago · 1 min read · YourStory

Starting October 15, 2026, select person-to-merchant UPI payments exceeding Rs 2,000 will attract a merchant discount rate of 0.4%, capped at Rs 300 per transaction. The Finance Ministry confirmed that consumers and peer-to-peer transfers remain exempt, with 96% of merchant transactions unaffected. Small vendors earning under Rs 1 lakh monthly will maintain zero-MDR status. Specific sectors like railways, fuel, and telecom will incur a flat Rs 5 charge, while capital market payments face a 0.02% fee. Additionally, 5% of collected MDR will fund small merchant digital adoption initiatives nationwide.