# UPI merchant fee of 0.4% on payments over Rs 2,000 from October 15 2026-09-24T12:07:22+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet The government will introduce a Merchant Discount Rate (MDR) of 0.4% on UPI payments above Rs 2,000 from October 15. Individual users will not pay the fee, only merchants will. The fee is capped at Rs 300 per transaction, with separate flat rates for fuel, telecom, insurance and railway payments. The National Payments Corporation of India (NPCI) operates UPI, which cost an estimated Rs 20,700 crore annually to run. Banks, payment companies and government subsidies have borne the cost until now. The government says 96% of all UPI transactions are below Rs 2,000 and will remain free. Small vendors with monthly UPI turnover under Rs 1 lakh are also exempt. However, merchants have pushed back. Traders in Ghaziabad have put up notices saying they will stop accepting UPI from October 15. Petrol dealers in Mumbai have threatened to reconsider UPI for high-value payments. Retail associations have raised concerns over thin margins, and the MDR itself attracts 18% GST. ## Indian Opinion Analysis The MDR move marks a shift from the government's earlier stance that UPI fees were not under consideration. The Reserve Bank of India had in 2021 deferred a similar proposal. The 0.4% rate matches the MDR on debit card transactions above Rs 2,000. Merchants already pay MDR on card payments, so the concern is not the fee itself but the precedent it sets. With 4% of transactions by count accounting for 67% of merchant payment value, the revenue impact on large retailers could be significant. The real test will be whether the exemption threshold stays at Rs 2,000 or is lowered in future reviews by the NPCI board. ## Coverage - thenewsminute.com Tags: Ghaziabad, merchant discount rate, Mumbai, NPCI, RBI, UPI Canonical: https://indianopinion.org/upi-merchant-fee-of-0-4-on-payments-over-rs-2000-from-october-15/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/upi-merchant-fee-of-0-4-on-payments-over-rs-2000-from-october-15/#story-in-brief