UPI MDR 0.4% Fee: Does Your ₹2,000+ Pay More?
From October 15, UPI payments above ₹2,000 to merchants attract a 0.4% charge, capped at ₹300. Person-to-person transfers and small payments stay free. The Supreme Court is now hearing a legal challenge to this new fee.
A ₹5,000 grocery bill via UPI now quietly costs ₹20 extra — that's 4 cups of chai.
Your UPI merchant payments above ₹2,000 now cost you extra
Key Takeaways
Check if your regular large UPI payments — rent, school fees, big grocery bills — are to merchants (P2M), as only these attract the 0.4% fee from October 15.
Compare payment options for bills above ₹2,000: fuel, railway, and insurance payments via UPI are capped at ₹5, so use UPI freely for these.
Watch the Supreme Court's ruling this Monday — if the court stays the MDR, the fee could be paused; follow GoCredit for an immediate update.
From October 15, UPI payments above ₹2,000 to merchants attract a 0.4% charge, capped at ₹300. Person-to-person transfers and small payments stay free. The Supreme Court is now hearing a legal challenge to this new fee.
Here's what happened: From October 15, UPI payments above ₹2,000 to merchants attract a 0.4% MDR, capped at ₹300 for transactions of ₹75,000 and above.. Essential sectors like railways, fuel, telecom, insurance, and agri inputs pay a flat ₹5 per transaction above ₹2,000, not the 0.4% rate.. The Supreme Court is scheduled to hear a plea challenging this MDR on Monday; person-to-person UPI transfers remain fully free..
What you should do: Check if your regular large UPI payments — rent, school fees, big grocery bills — are to merchants (P2M), as only these attract the 0.4% fee from October 15.. Compare payment options for bills above ₹2,000: fuel, railway, and insurance payments via UPI are capped at ₹5, so use UPI freely for these.. Watch the Supreme Court's ruling this Monday — if the court stays the MDR, the fee could be paused; follow GoCredit for an immediate update..
Splitting a large merchant bill into two UPI payments below ₹2,000 each keeps both transactions completely MDR-free under the current rule.
For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.
Explore TARA — Your Financial Co-Pilot
Retirement, tax, EMI, refinance and savings calculators — all free. Get a plan aligned to YOUR income, goals and CIBIL.
Try TARA — Free →References
- [1]“SC to hear plea against MDR on UPI merchant payments above ₹2,000 on Monday” Finance · 27 Sept 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.
Every story here posts to X the moment it breaks. Follow @gocredit_news →