Story perspectives

India to Charge 0.4% UPI Fee Over INR2,000

By Drooid · Sep 17, 2026, 2:59 PM UTC · How we work

Summary

Dealers Petition Fee

The merchant discount rate fee is being challenged in a public-interest case filed before India’s Supreme Court.
A dealers’ association representing gasoline retailers petitioned the Supreme Court to exempt its members from the merchant discount rate.
A LocalCircles poll of 32,796 firms in 242 districts found 41% would refuse any charge over INR2,000.
Citi projects the fee will generate INR160-INR170 billion annually, with 60% flowing to banks.

Summary

India UPI Merchant Fee

India’s government will levy a 0.4% merchant discount rate on Unified Payments Interface (UPI) payments above INR2,000 starting Oct 15.
The fee caps at INR300 for transactions of INR75,000 or more.
Person-to-person transfers and payments up to INR2,000 remain free.
Retailers Association of India warns the MDR could push small merchants toward cash.
Paytm, Axis Bank and Yes Bank shares rose 2-8% after the announcement.

History

Historical Context

The 2010 US Durbin amendment, part of Dodd-Frank, capped debit-card interchange fees at 0.05 % plus 21 cents, prompting global fee limits. The European Commission set a 0.2 % debit-card cap in 2015, and Australia reduced rates from 0.95 % to 0.5 % in 2003. Now the Supreme Court hears a Dealers’ Association challenge to India’s 0.4 % UPI MDR.

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Dealers Petition Fee

The merchant discount rate fee is being challenged in a public-interest case filed before India’s Supreme Court.
A dealers’ association representing gasoline retailers petitioned the Supreme Court to exempt its members from the merchant discount rate.
A LocalCircles poll of 32,796 firms in 242 districts found 41% would refuse any charge over INR2,000.
Citi projects the fee will generate INR160-INR170 billion annually, with 60% flowing to banks.

1 / 3