For more than six years, India's UPI ecosystem has operated on an unusual proposition: enormous transaction volumes without a conventional merchant fee on bank-account UPI payments. That model helped make UPI a mass-market payment infrastructure, but it also left banks, payment service providers and fintech platforms carrying the cost of an increasingly large digital payments network.
That equation is now changing.
From October 15, 2026, specified UPI person-to-merchant transactions above Rs 2,000 will attract a 0.4 percent Merchant Discount Rate (MDR), capped at Rs 300 per transaction.
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Silicon India