UPI Charges Explained: What Stays Free and What Changes on 15 October 2026
There has been a lot of talk about “UPI charges”. Here is the simple version: UPI remains free for people who pay. A small fee, called the Merchant Discount Rate (MDR), may apply from 15 October 2026 on certain merchant payments above ₹2,000, and it is paid by the merchant, not by you.
Quick answer: If you send money to friends or family, or pay up to ₹2,000, you pay nothing extra. The 0.4% fee (capped at ₹300) applies only to eligible merchants on some payments above ₹2,000.
Key points
- Free: UPI payments up to ₹2,000 and RuPay debit card payments stay free of charge, as reported.
- Person-to-person: sending money to another person stays free, whatever the amount.
- What may be charged: a 0.4% MDR, capped at ₹300 per transaction, on select merchant payments above ₹2,000, from 15 October 2026.
- Who pays: eligible merchants. The Finance Minister has said MDR applies to merchants and not to customers.
- Small merchants: reported to be exempt.
- The rule: a Finance Ministry notification dated 14 September 2026 says no bank or system provider may directly or indirectly charge a person making or receiving a payment in the specified free modes.
What it means for you
| If you… | Do you pay? |
|---|---|
| Send money to a friend or family member | No |
| Pay a shop or tea stall up to ₹2,000 | No |
| Pay a large merchant bill above ₹2,000 | You pay the same price. The merchant may bear a small fee. |
| Pay with a RuPay debit card | No |
Simple tips
- Check the amount on your payment screen before you enter your UPI PIN. It should match the bill.
- If any app or shop asks you for an extra “UPI fee”, ask for the rule in writing and report it to your bank.
- Use only official apps and never share your PIN or OTP.
This is general information, not financial advice. Rules can change. Information is from public reports and official pages, checked on 20 September 2026. Details can change, so please confirm on official sources.
