Centre introduces UPI charges of 0.4% on merchant transactions above Rs 2,000
Banks have been advised to ensure that the charges are not passed on to the customers, the Ministry of Finance said.
Black News 
The Union government on Monday clarified that Unified Payments Interface transactions to merchants valued above Rs 2,000 will attract a fee of 0.4%.
“Banks have been advised to ensure that merchants do not pass Merchant discount rate charges on to customers,” the Ministry of Finance said. “Application providers are expressly prohibited from imposing platform fees or hidden charges.”
Merchant discount rate is a fee charged to businesses by banks to cover the costs of processing transactions. The rate typically ranges from 1% to 3% of the transaction value for credit card payments and can be up to 0.9% for debit card transactions.
This 0.4% fee has been capped at Rs 300 per transaction for payments of Rs 75,000 and above.
The ministry said that the new framework will have no impact on person-to-person transactions, “irrespective of the amount transferred”.
Regarding Merchant Discount Rate (MDR) on Select UPI (P2M) Transactions
— NPCI (@NPCI_NPCI) September 15, 2026
Please refer to the FAQs here: https://t.co/DTOZFVHAVB pic.twitter.com/4HMU0YZ2AC
Small merchants who receive up to Rs 1 lakh per month will also continue without being liable for paying any merchant discount rate on their transactions.
Essential sectors that operate on “narrow margins” such as railways, telecommunications, insurance, fuel and agricultural inputs, will attract a flat merchant discount rate of Rs 5 per transaction.
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