# UPI to levy 0.4% merchant fee on payments above Rs 2,000

2026-09-15T15:07:20+00:00 | Governance | Indian Opinion Desk

Corroboration: 4 independent outlets

The National Payments Corporation of India (NPCI) will impose a 0.4% Merchant Discount Rate (MDR) on person-to-merchant UPI transactions above Rs 2,000 from October 15, 2026. The fee is capped at Rs 300 for transactions of Rs 75,000 or more. Consumers will continue to use UPI free of charge, and transactions below Rs 2,000 remain exempt, covering over 95% of merchant payments by volume. Small merchants receiving up to Rs 1 lakh per month through UPI are also exempt. NPCI says the MDR will fund infrastructure, cybersecurity, and innovation, with a dedicated fund planned for rural and small-city merchant adoption. The annual cost of running UPI is estimated at Rs 20,000 crore. The move follows an amendment to the Payment and Settlement Systems Act passed in the Monsoon Session. Congress leaders Rahul Gandhi and Mallikarjun Kharge criticised the government, calling it a "digital payments tax" that will ultimately raise prices for consumers. Gandhi also alleged the policy shift was due to US pressure in trade negotiations.

## Indian Opinion Analysis

TechCrunch and India Today frame the MDR as a necessary step toward sustainability, citing NPCI's Rs 20,000 crore cost estimate. The Print leads with opposition criticism, calling the notification a "quiet" door to fees, and includes Rahul Gandhi's claim that 65% of UPI transaction value is now chargeable. The Times of India runs straight FAQs without political framing. The critical coverage omits the exemption for 95% of transactions by volume, while the pro-sustainability coverage downplays the potential pass-through cost to consumers. The RBI and NPCI's fund details due in three months will clarify the net impact on merchants.

## Coverage

- techcrunch.com (neutral report) <https://techcrunch.com/2026/09/15/india-ends-free-ride-for-larger-transactions-on-its-ubiquitous-digital-payments-network/>
  Leads with policy change and cost rationale, includes industry estimates and sceptical questions
- indiatoday.in (neutral report) <https://www.indiatoday.in/business/story/upi-remains-free-for-consumers-payments-over-rs-2000-to-merchants-will-attract-04-fee-2995255-2026-09-15>
  Straight factual report with worked examples and FAQs, no political angle
- theprint.in (government critical) <https://theprint.in/politics/congress-takes-aim-at-modi-govt-over-upi-notification-quietly-opens-door-to-charges-says-rahul/3043129/>
  Leads with Congress attack, foregrounds opposition framing of 'digital tax' and US pressure
- timesofindia.indiatimes.com (neutral report) <https://timesofindia.indiatimes.com/business/india-business/what-does-mdr-on-person-to-merchant-upi-transactions-above-rs-2000-mean-for-you-faqs-answered/articleshow/134266181.cms>
  Full FAQ reproduction, no editorialising or political context

Tags: Mallikarjun Kharge, NPCI, Rahul Gandhi, RBI, UPI
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