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Earlier report,
Proposed UPI MDR of 0.4% on merchant payments above Rs 2,000 expected 15 October, may slip to 1 January 2027
Our read
The 0.4% UPI merchant charge is more likely to start after 15 October, on or near 1 January 2027, than on the expected date, and the rate or threshold may soften before launch.
For operators
If the proposed 0.4% UPI MDR on merchant payments above Rs 2,000 (capped at Rs 300) lands on 15 October, a Rs 5,000 basket would cost you Rs 20 in fees, so model the margin hit on high-ticket omni-channel orders now, even though the date could slip to 1 January 2027.
Watch
NPCI circular confirming the 0.4% MDR before 15 October would mean no slip to 1 January 2027, so merchants must price in the charge now.
The report
NPCI has addressed price-rise concerns: the charge is capped at Rs 300 per transaction and is paid by merchants, not consumers. It has not finalised the revised timeline, and the government has made no formal announcement.
- Merchant payments above ₹2,000
- 0.4 percent
- Cap per transaction
- ₹300
- Essential services, flat charge
- ₹5
- Capital market payments
- 0.02 percent
What we verified
Checked against the other reports of this story.
- MDR on P2M UPI transactions above Rs 2,000: 0.4% — Free Press Journal Business and Financial Express agree.
- MDR cap for transactions above Rs 75,000: Rs 300 — Free Press Journal Business and Financial Express agree.
Signals to track
- Any change to the ₹2,000 threshold or the ₹300 cap in the final circular
- Statements from PhonePe, Google Pay or Paytm on how they will bill merchants
- Merchant association or large-retailer pushback, and any surcharge on UPI payments
- Official word on the ₹5 flat rate for essential services and the 0.02% capital-market rate
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- NPCI is likely to issue a formal circular that fixes the start date and category rates, and may take the later 1 January 2027 date to give banks and apps time to prepare.
- Merchant and trade associations are likely to lobby for a higher threshold than ₹2,000 or for exemptions for small merchants.
- Google Pay, PhonePe and Paytm are likely to keep consumer-facing UPI free and pass the cost to merchants through revised acquiring or settlement terms.
- Larger merchants may steer customers to cards, wallets or cash on payments above ₹2,000 if the MDR takes effect, and some may add surcharges.
- The government and the RBI may be pressed to clarify how the MDR fits with UPI's zero-cost framing, which could lead to changes before launch.
Updates
Each later report on this story, newest first. Earlier entries are never edited; a correction is a new entry.
NPCI delays 0.4% UPI MDR on payments above Rs 2,000 until after Diwali; new date to be announced
- MDR in basis points: 40
- MDR per Rs 2,000 paid: Rs 8
- MDR per Rs 10,000 paid: Rs 40
- UPI merchants accepting payments: 100 million
- Card acceptance terminals: 11 million
NPCI sets 0.4% MDR on UPI merchant payments above Rs 2,000 from 15 October; P2P stays free
- P2P UPI transaction charges: 100% free
On the record
Earlier NPCI reports on RetailIntel, newest first.
Channel facts
From the report. Source details below
| Flat charge for essential services: | Rs 5 |
|---|---|
| Capital market MDR: | 0.02 percent |
| Example MDR on Rs 5,000 payment: | Rs 20 |
| Expected effective date: | October 15, 2026 |