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The planned 0.4% MDR on certain UPI merchant payments will not start on October 15. Here is what remains free, who may eventually pay the merchant-side charge, how the ₹300 cap works and what NRIs should know.
India’s new UPI merchant fee framework was scheduled to begin on October 15, 2026, but reports now indicate that implementation could be pushed to January 2027. Customers are not required to pay the MDR. Here is what is confirmed, what may change and how ₹500, ₹2,000 and ₹5,000 payments are treated.
Finance Minister Nirmala Sitharaman says the new UPI MDR is not a tax and cannot be passed on to customers. Here is who actually pays, what changes from October 15 and which UPI transactions remain free.
Several trader associations have called for a voluntary “No UPI Day” on October 2 against the new MDR on some merchant UPI payments above ₹2,000. UPI itself will not shut down, customers will not pay the MDR, and most transactions remain free.
