High Exam Priority
NPCI Introduces 0.4% MDR on Specific UPI P2M Transactions Exceeding ₹2,000 Effective October 2026
26 September 2026
4 min read
A Merchant Discount Rate (MDR) of 0.4% will be levied on specific Person-to-Merchant (P2M) UPI transactions exceeding ₹2,000 starting October 15, 2026. However, standard individual-to-individual transfers and small vendors meeting exemption criteria will remain completely unaffected.
Key Highlights
- An MDR of 0.4% is applicable on P2M UPI transactions exceeding ₹2,000, with a maximum cap of ₹300 on transactions of ₹75,000 or above.
- End customers will not bear any extra charges and will continue to pay the list price without incurring direct UPI fees.
- Micro merchants and small vendors receiving up to ₹1 lakh per month via UPI QR codes are completely exempted from this levy.
- Peer-to-peer (P2P) transfers and UPI AutoPay services for subscriptions or utility bills will attract zero MDR charges.
Exam Quick Facts
Nodal Ministry / Dept
Ministry of Finance, Government of India
Key Bodies
National Payments Corporation of India (NPCI), Reserve Bank of India (RBI)
Constitutional & Legal Context
Regulated under the Payment and Settlement Systems Act, 2007, governed by the Reserve Bank of India.
Static GK Connection
NPCI is an umbrella organization for operating retail payments and settlement systems in India, founded in 2008 under the provisions of the Companies Act, 2013.