NPCI disclosed on Tuesday that all consumer‑to‑merchant UPI transfers exceeding ₹2,000 will carry a 0.4% Merchant Discount Rate, roughly ₹8 on a ₹2,001 transaction, while certain sectors such as railways, telecom, insurance and fuel will pay a flat ₹5 fee. The change will take effect on 15 October.
Person‑to‑person transfers remain free, and merchants whose monthly UPI QR volumes stay below ₹1 lakh will also be exempt from any fee, meaning that about 96% of UPI P2M transactions are unaffected.
The finance ministry clarified that the MDR is not a tax, but a revenue share among banks, payment app providers and the ecosystem, aimed at sustaining the digital payments infrastructure.
Opposition leaders slammed the move, with Congress president Mallikarjun Kharge decrying it as "anti‑people" and Rahul Gandhi calling for a rollback, while BJP spokesperson Pradeep Bhandari dismissed the criticism as misinformation.
The government has stated the fee will not be reconsidered, and the implementation will begin on 15 October, with regulators monitoring the impact on merchant payments and consumer behaviour.