# NPCI announces UPI MDR framework, most transactions remain free

2026-09-15T21:16:40+00:00 | Governance | Indian Opinion Desk

Corroboration: 3 independent outlets

NPCI has released the Merchant Discount Rate (MDR) framework for UPI transactions, effective 15 October 2026. The new rules apply only to select Person-to-Merchant (P2M) payments above Rs 2,000, while all Person-to-Person (P2P) transfers remain completely free. Small merchants receiving up to Rs 1 lakh per month via UPI QR codes under the P2PM category will continue to enjoy zero MDR. For P2M transactions above Rs 2,000, a 0.4% MDR will apply, capped at Rs 300 per transaction. Essential services such as railways, fuel, telecom, and insurance will attract a flat fee of Rs 5 per transaction. The Ministry of Finance says 96% of merchant transactions and 70% of total transaction value will remain outside the MDR framework. MDR is not a tax but is distributed among banks and payment providers to support the UPI ecosystem. A development fund equivalent to 5% of MDR collected will promote digital payments in smaller towns.

## Indian Opinion Analysis

All five sources report the same facts, but aajtak.in frames the story with a consumer-worry headline, leading with "charge on UPI" before clarifying it does not apply to ordinary users. Livemint and Gulf News lead with the reassurance that UPI remains free. The aajtak.in coverage overstates the drama of a charge being reintroduced, while Livemint and Gulf News emphasise the narrow scope and the government's rationale of system sustainability. The underlying news is uniform: most users and merchants are unaffected. The actual test is whether the 5% development fund will meaningfully expand digital payment infrastructure in rural areas.

## Coverage

- aajtak.in (neutral report) <https://www.aajtak.in/business/news/story/upi-mdr-fixed-for-transactions-over-rs-2000-new-npci-rule-tutd-dskc-2643370-2026-09-15?utm_source=rss>
  Provides detailed explanation but leads with consumer anxiety framing
- aajtak.in (neutral report) <https://www.aajtak.in/business/utility/story/upi-to-remain-100-per-cent-free-for-consumers-new-mdr-rules-effective-october-15-details-tuta-dskc-2643415-2026-09-15?utm_source=rss>
  Provides detailed explanation but leads with consumer anxiety framing
- gulfnews.com (neutral report) <https://gulfnews.com/business/banking/upi-transactions-above-inr-2000-could-be-charged-but-can-you-still-transfer-to-friends-for-free-1.500675552>
  Straight news report, leads with reassurance that UPI is still free
- livemint.com (neutral report) <https://www.livemint.com/money/personal-finance/npci-mdr-upi-transactions-what-change-small-merchants-zero-payments-above-rs-2000-0-4-pc-charge-cap-rs-300-over-rs-75000-11789480810958.html>
  Explainer focused on user impact, emphasises no charge for users
- livemint.com (neutral report) <https://www.livemint.com/money/personal-finance/new-upi-mdr-rules-explained-will-you-pay-more-what-it-means-for-users-like-you-and-me-11789483918766.html>
  Explainer focused on user impact, emphasises no charge for users

Tags: MDR, Ministry of Finance, NPCI, UPI
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