UPI MDR 0.4%: Can Merchants Charge You Extra?
NPCI told India's Supreme Court that a new 0.4% charge on UPI payments above ₹2,000 applies only to merchants — and merchants are strictly banned from passing this cost on to customers at checkout.
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0.4% on a ₹2,500 UPI payment is ₹10 — your auto fare to the kirana store costs more than the fee itself.
New UPI charge hits merchants — but can they sneak it onto your bill?
Key Takeaways
Refuse payment if any merchant — offline or online — adds a UPI surcharge or 'processing fee' at checkout for a UPI transaction; it violates NPCI rules.
Report rule-breaking merchants to NPCI's helpdesk at npci.org.in or raise a complaint through your UPI app's dispute centre.
Check your digital receipts for any new line-item charges on UPI bills above ₹2,000 — screenshot and report any unexplained deductions immediately.
NPCI told India's Supreme Court that a new 0.4% charge on UPI payments above ₹2,000 applies only to merchants — and merchants are strictly banned from passing this cost on to customers at checkout.
Here's what happened: NPCI confirmed in the Supreme Court that a Merchant Discount Rate of up to 0.4% applies only on UPI person-to-merchant transactions exceeding ₹2,000.. Merchants are explicitly prohibited from passing this MDR cost on to customers — no surcharges, checkout fees, or recovery charges are permitted.. UPI app providers such as PhonePe and Google Pay are also barred from levying any additional platform fees on UPI-based payments..
What you should do: Refuse payment if any merchant — offline or online — adds a UPI surcharge or 'processing fee' at checkout for a UPI transaction; it violates NPCI rules.. Report rule-breaking merchants to NPCI's helpdesk at npci.org.in or raise a complaint through your UPI app's dispute centre.. Check your digital receipts for any new line-item charges on UPI bills above ₹2,000 — screenshot and report any unexplained deductions immediately..
Pro tip: MDR on UPI is a merchant-side cost, just like card swipe fees — the law has always protected you from paying it directly. This Supreme Court clarification strengthens your right to refuse any counter-level surcharge.
For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.
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- [1]“NPCI tells Supreme Court merchants cannot pass new UPI charges on to customers” MEDIANAMA · 6 Nov 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.
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