The National Payments Corporation of India, or NPCI, has released details of the new Merchant Discount Rate, or MDR, framework for select UPI transactions. From October 15, 2026, a 0.4 per cent MDR will apply to eligible Person-to-Merchant, or P2M, UPI transactions above Rs 2,000, with a cap of Rs 300 for transactions of Rs 75,000 and above. Consumers will not be charged for UPI payments, while Person-to-Person transfers will remain free. Small merchants under the P2PM category, receiving up to Rs 1 lakh per month through UPI QR codes, will continue to pay zero MDR. Certain categories, including insurance, fuel and utilities, will attract a flat Rs 5 MDR above Rs 2,000. NPCI said UPI processed 2,451 crore transactions worth nearly Rs 30 lakh crore in August 2026.
