Story perspectives

India cuts UPI merchant fees 0.4% from Oct 15

By Drooid · Sep 16, 2026, 4:57 PM UTC · How we work

Summary

Story summary

India’s government announced a 0.4% merchant discount rate on UPI person-to-merchant payments above INR2,000, effective 15 October 2026.
Merchants will bear the fee, capped at INR300 per transaction, with a flat INR5 charge for essential services.
Person-to-person UPI transfers and payments up to INR2,000 remain free, and merchants earning <=INR1 lakh monthly are exempt.
Advocate Anjan Datta filed a public-interest litigation to quash the MDR framework pending transparent consultation and RBI review.

History

Historical Context

NPCI launched the fee-free Unified Payments Interface in April 2016, and the RBI kept UPI transactions exempt from charges through 2019. In August 2026 the Lok Sabha passed a bill allowing a 0.4% merchant discount rate for Indian merchants on payments above INR2,000, echoing the 2018 Visa-Mastercard fee debate that prompted Anjan Datta’s lawsuit.

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Story summary

India’s government announced a 0.4% merchant discount rate on UPI person-to-merchant payments above INR2,000, effective 15 October 2026.
Merchants will bear the fee, capped at INR300 per transaction, with a flat INR5 charge for essential services.
Person-to-person UPI transfers and payments up to INR2,000 remain free, and merchants earning <=INR1 lakh monthly are exempt.
Advocate Anjan Datta filed a public-interest litigation to quash the MDR framework pending transparent consultation and RBI review.

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