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UPI Charges Return: ₹2000 Limit Set
15 Sep
Summary
- Transactions under ₹2,000 via UPI and RuPay are now exempt from bank charges.
- Merchant Discount Rate (MDR) is reintroduced for UPI transactions above ₹2,000.
- The government amended the Payment and Settlement Systems Act to allow these charges.
As of September 15, 2026, India has reintroduced charges on certain digital transactions, specifically for UPI payments exceeding ₹2,000. Transactions below this threshold via UPI, along with all RuPay debit card payments, remain exempt from any fees imposed by banks or payment providers. This marks the return of the Merchant Discount Rate (MDR) for UPI.
MDR is a fee charged to merchants for processing digital payments. It had been set to zero for UPI since January 2020 to encourage digital adoption. The government's recent amendment to the Payment and Settlement Systems Act, 2007, now permits the levy of these charges on UPI and other specified digital payment methods.
Detailed guidelines on the MDR charges are anticipated soon from the National Payment Corporation of India (NPCI). The specific rates will be determined by an NPCI-led committee. The finance ministry previously stated that any future MDR charges would be nominal and apply to a limited set of merchant transactions, with the majority remaining fee-free.
