Quick answer
Are UPI payments free?
Individual
Rs 0
The individual does not pay UPI fees for person-to-person transfers or merchant payments under the published framework.
Merchant
0% for now
Bank-account merchant MDR remains zero while the rollout is deferred. Announced future rates are shown below, not charges payable today.
MDR means merchant discount rate. It is a payment-processing fee charged on the merchant side, not a tax on the full payment. The Ministry of Finance says individuals pay no UPI transaction fee and banks must ensure merchants do not pass MDR to them. Read the Ministry of Finance announcement.
What happens to UPI charges above ₹2,000?
Bank-account UPI remains zero MDR, including above ₹2,000, while the rollout is postponed. The announced future framework uses 0.40% for eligible standard merchant payments above ₹2,000, capped at ₹300 before GST. Selected sectors use a flat fee or investment rate. These future rates are not payable today.
Calculate the merchant cost for your amountWhen will the new UPI merchant charges start?
On 13 October 2026, reports of NPCI's statement said the 15 October rollout was deferred until after Diwali. The exact date will be notified separately. January 2027 appeared in earlier proposals but is not a confirmed start date. The announced fee structure remains a preview; bank-account UPI stays zero MDR for now. RuPay credit-card UPI follows separate pricing.
Sources: Business Standard, Moneycontrol, and The Indian Express, reporting the NPCI statement on 13 October. NPCI's original notice could not be retrieved directly during this update.
Ministry of Finance clarification on existing zero-MDR policyRate table
Announced UPI merchant rates: rollout postponed
| Payment type | Amount / threshold | Individual pays | Merchant pays | MDR cap | GST on MDR |
|---|---|---|---|---|---|
| Person-to-person transfer | Any permitted amount | Rs 0 | Not applicable | Not applicable | None |
| Standard merchant | Up to Rs 2,000 | Rs 0 | Rs 0 MDR | Not applicable | None |
| Standard merchant | Above Rs 2,000 | Rs 0 | 0.40% | Rs 300 | 18% of MDR |
| Listed flat-fee sectors | Above Rs 2,000 | Rs 0 | Rs 5 flat | Rs 5 flat fee | Rs 0.90 |
| Capital markets | Above Rs 2,000 | Rs 0 | 0.02% | Rs 300 | 18% of MDR |
| Eligible P2PM small merchant | Any supported amount | Rs 0 | Rs 0 MDR | Not applicable | None |
Listed flat-fee sectors include railways, telecom, insurance, fuel, and public utilities. Capital-market treatment covers mutual funds, securities, brokers, and dealers. The acquiring bank assigns the final merchant category. Source documents for thresholds, caps, and exemptions.
What do merchants pay?
For a standard ₹10,000 bank-account UPI payment under the announced framework, merchant MDR is ₹40 and GST on MDR is ₹7.20. The total processing cost is ₹47.20, leaving ₹9,952.80 after these fees. Merchant fees depend on category and exemptions, while private settlement arrangements can affect the final amount received.
Estimate UPI merchant charges and receiptsAre RuPay credit-card payments different?
Yes. Credit-card-funded UPI follows separate merchant pricing. The applicable rate and threshold depend on the merchant category, turnover, acquirer, and provider. The bank-account 0.40% rate and ₹300 cap should not be assumed for RuPay credit-card payments.
Check RuPay credit card UPI chargesThe calculation
How announced UPI MDR and GST would be calculated
For a standard merchant payment above Rs 2,000, MDR is 0.40% of the transaction amount, up to Rs 300. GST is then calculated at 18% on the MDR, not on the purchase amount. A 0.40% MDR therefore produces a total processing cost equal to 0.472% before the MDR cap changes the result.
Rs 3,000 payment
- MDR
- Rs 12.00
- GST on MDR
- Rs 2.16
- Merchant cost
- Rs 14.16
Rs 50,000 payment
- MDR
- Rs 200.00
- GST on MDR
- Rs 36.00
- Merchant cost
- Rs 236.00
Rs 1,00,000 payment
- MDR
- Rs 300.00 capped
- GST on MDR
- Rs 54.00
- Merchant cost
- Rs 354.00
These are announced-rate previews, not costs payable today. Bank-account MDR and GST on that MDR remain zero during the deferral. The individual still pays Rs 0 in UPI fees.
Important differences
Exceptions in the announced future framework
Small merchants: eligible P2PM merchants remain at zero MDR. Their classification depends on the merchant account and payment-provider records, not only on the value of one payment.
Flat-fee categories: payments above Rs 2,000 to listed sectors use Rs 5 MDR before GST instead of 0.40%. With 18% GST on that fee, the merchant-side cost is Rs 5.90.
Capital markets: eligible mutual fund, securities, broker, and dealer payments above Rs 2,000 use 0.02% MDR, capped at Rs 300 before GST.
RuPay credit card on UPI: credit-backed UPI follows separate pricing. Merchant MDR can vary by category, turnover, acquirer, and provider. Read the RuPay credit card UPI charges guide and use the rate shown by the merchant's provider.
Common confusion
Three things UPI charges do not mean
- There is no GST on the full UPI payment. GST is calculated on MDR or another taxable processing fee where one applies.
- Rs 2,000 is not an individual fee threshold. It is the transaction threshold used for selected merchant-side MDR rules.
- Payment limits are not transaction charges. Bank and category limits control how much can be sent; they do not create a fee for the individual.
Fast answers
UPI charges FAQ
Are UPI transactions charged for individuals?
No. Individuals continue to pay no UPI transaction fee. Person-to-person transfers also remain free. The bank-account merchant MDR rollout has been postponed; a new date is awaited.
What is the UPI charge above Rs 2,000?
Bank-account UPI remains zero MDR for now. The postponed framework announces 0.40% MDR above Rs 2,000 for eligible standard merchants, capped at Rs 300 before GST. The individual pays no UPI fee.
Does GST apply to the full UPI payment?
No. GST applies to the MDR or payment-processing fee where that service is taxable, not to the full value of the UPI payment.
Do small merchants pay UPI MDR?
Eligible small merchants classified under P2PM continue with zero MDR. A payment above Rs 2,000 alone does not change an eligible P2PM merchant into a standard merchant.
Are RuPay credit card UPI charges the same?
No. RuPay credit-card-on-UPI payments follow separate credit-product pricing. Merchant cost can vary by category, turnover, acquirer, and payment provider.
When do the new UPI merchant charges start?
Reports of NPCI's 13 October 2026 statement say the rollout is postponed until after Diwali. The exact implementation date will be notified separately; 15 October is no longer the start date.
Check a specific payment
Enter the amount, choose who you are paying, and compare bank-account UPI with RuPay credit-card UPI. The result separates the individual fee, merchant MDR, GST, and amount after shown charges.
Open the UPI fee calculator