Overview
From 15 Oct, UPI will cap merchant fees on transactions above ₹2,000, while leaving charges at zero for consumers and the majority of small vendors.
What changes
- Merchant discount rate, or MDR, will be capped for transactions exceeding ₹2,000.
- Fees for consumers and most small merchants remain free, maintaining no-cost digital payments for end users.
- The shift creates a revenue stream to support ongoing digital infrastructure upgrades and align UPI with global payment norms.
Who is affected
- Medium to large merchants processing higher-value transactions will face the capped charges.
- Small traders and everyday users continue to benefit from cost-free payments.
Why it matters
The policy aims to sustain UPI’s growth while funding modernization efforts and improving interoperability with international payment systems.
