UPI New Rules: What Changes From October 15?
India's digital-payment ecosystem is preparing for a significant change after the National Payments Corporation of India announced a new Merchant Discount Rate structure for certain UPI transactions.
From October 15, 2026, eligible person-to-merchant UPI transactions above ₹2,000 will attract a 0.4% merchant discount rate. The charge is intended for the merchant side of the transaction and, according to the government's clarification, should not be separately passed on to customers as a UPI platform or bank charge.
The new system includes different arrangements for some sectors. Railway, telecom, insurance and fuel-related merchant payments above the specified threshold will attract a flat charge under the announced framework. Small merchants meeting the specified monthly QR-payment criteria will also receive an exemption.
UPI has become one of India's most important digital-payment platforms. In August 2026 alone, the network processed about 24 billion transactions, according to Reuters. The new revenue structure is intended to support investment in infrastructure, cybersecurity, fraud prevention and reliability.
For consumers, the important distinction is between customer charges and merchant-side MDR. NewsZiffy readers should check official bank or NPCI communications if they receive messages claiming that customers must pay a separate UPI fee.
