UPI Charges From October 15? What The New MDR Rules Mean For You

UPI payments remain free for consumers, but a revised Merchant Discount Rate (MDR) framework is set to apply from October 15 to select merchant transactions. Payments to merchants up to ₹2,000 will remain MDR-free, while transactions above ₹2,000 in certain categories will attract charges on the merchant side. Railways and fuel payments will face a flat ₹5 MDR above ₹2,000, while other eligible high-value merchant transactions will attract 0.4%, capped at ₹300. Sending money to friends remains free. The key question: could merchants pass their additional costs on to customers? The government also plans a fund to support digital payment infrastructure for small vendors and Tier-3 markets.