Finance Ministry officials revealed the new fee will apply to person‑to‑merchant UPI transactions exceeding ₹2,000, a move that will affect roughly 4% of the platform's 24.5 billion transactions recorded in August 2026,
The charge will be capped at ₹300 for payments of ₹75,000 or more, and P2P transfers will remain free regardless of amount,
Banks have been instructed to ensure merchants do not recover the MDR from consumers, and the ministry said UPI apps cannot impose separate platform fees,
Finance Minister Nirmala Sitharaman tweeted on X that the fee will help make UPI self‑sustaining, support infrastructure and cybersecurity, and that a monitoring mechanism is being drafted to enforce compliance,
The ministry also rejected claims that the policy was influenced by foreign pressure, citing NPCI rules that restrict UPI credit card usage to RuPay only, and said the 0.4% rate is a domestic decision,
Implementation will begin on 15 October 2026, with a phased rollout and real‑time oversight to ensure consumers are not burdened by the new fee.