NPCI announced that from 15 October 2026 a fee of 0.4% will be levied on merchant UPI payments exceeding ₹2,000. The fee applies only to merchant transactions and cannot be passed on to customers.
The fee will be capped at ₹300 for individual transactions above ₹75,000. For certain merchant categories—railways, telecommunications, insurance, and fuel—a flat merchant discount rate (MDR) of ₹5 will be applied.
The fee will not apply to person‑to‑person (P2P) UPI transfers. NPCI said the revenue from the new fee will be used to strengthen the payment infrastructure, promote innovation, enhance cyber‑security and improve customer service.
The decision follows discussions between banks and payment companies after the government cleared a legal path to charge fees on large UPI transactions. Earlier, Reuters reported that NPCI and RBI officials were considering a 0.4% fee for merchant payments above ₹2,000, but the final rate and fee sharing had not been decided.
In August, UPI recorded nearly 2.4 billion transactions worth approximately $311 billion.
