India Ends Six-Year Free UPI Era For Some Large Merchant Payments. Here’s What Changes
For millions of Indians, buying something, scanning QR code and the payment is done in seconds just on a click has become a routine. Whether it is paying for groceries, ordering food or splitting a restaurant bill, Unified Payments Interface (UPI) has made digital payments simple.
But after more than six years of largely free UPI transactions, the Indian government is changing the way some merchant payments are funded.
India is all set to introduce a Merchant Discount Rate (MDR) of 0.4 per cent on specified UPI Payments to merchants above Rs 2,000 ($21), starting from October 15, 2026.
The move marks a shift away from UPI’s long-standing zero-MDR model for such transactions.
The change, however, does not mean that consumers will suddenly have to pay a UPI fee every time they scan a QR code.
India’s Finance Ministry has clarified that person-to-person UPI transfers will remain completely free, regardless...
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