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₹5 UPI Fee on Loans Over ₹2000 from Oct 15!
25 Sep
Summary
- A ₹5 MDR will apply to UPI loan repayments over ₹2,000 starting Oct 15.
- The merchant, not the borrower, bears the new UPI transaction fee.
- UPI AutoPay for EMIs below ₹2,000 will not attract the MDR charge.
From October 15, 2026, a new Merchant Discount Rate (MDR) will be implemented for specific UPI transactions. Any UPI payment of ₹2,000 or more used for debt collection, such as loan repayments and EMI collections, will attract a ₹5 fee.
This charge is designated for the merchant and is not an additional cost for the borrower. Lenders or collection agencies will typically cover this fee for direct loan repayments. For credit card payments, the credit card issuer is responsible for the MDR.
Transactions financed through credit or EMI at the point of sale are distinct from subsequent loan repayments. While the initial purchase might be subject to MDR based on its payment method, the following monthly EMI payments will not incur this fee.
UPI AutoPay, used for EMI collections, will not be subject to the ₹5 MDR, even for amounts exceeding ₹2,000, as confirmed by NPCI guidelines. Credit-linked UPI transactions, such as those using RuPay credit cards or pre-sanctioned credit lines, will adhere to the rules of their respective credit products.
