NPCI sets 0.4% UPI MDR above Rs 2,000 from 15 Oct
UPI MDR now has a rate and a date. NPCI has set 0.4 percent on select merchant transactions above Rs 2,000, capped at Rs 300 from Rs 75,000, effective 15 October 2026. Everything up to Rs 2,000 stays at zero.
- The rate is 0.4 percent on select Person-to-Merchant UPI transactions above Rs 2,000, effective 15 October 2026. Transactions up to Rs 2,000 continue at zero MDR.
- The fee is capped at Rs 300 for amounts of Rs 75,000 and higher, which is exactly 0.4 percent of Rs 75,000. Above that point the rupee fee stops growing and the effective rate falls as the ticket rises.
- Merchants pay, consumers pay nothing. Small vendors under the P2PM framework stay exempt, and railways, telecom, insurance and fuel get a flat Rs 5 per transaction instead of the percentage.
- The fee applies to full transaction value, not the amount above the threshold: Entrackr's worked examples are Rs 12 on Rs 3,000 and Rs 200 on Rs 50,000. The report cites no circular number and does not say whether GST applies on top.
NPCI has set a merchant discount rate on UPI. Entrackr reported the framework on 15 September: 0.4 percent on select Person-to-Merchant transactions above Rs 2,000, a fee capped at Rs 300 per transaction for amounts of Rs 75,000 and higher, and a commencement date of 15 October 2026. The report does not cite a circular number or a notification reference, so this is NPCI’s framework as reported, not a numbered instrument you can quote at a gateway.
Transactions up to Rs 2,000 continue at zero MDR. Consumers continue to pay nothing; the charge sits with the merchant. Small vendors under the Person-to-Person Merchant framework remain exempt, which Entrackr describes as covering small merchants receiving up to Rs 1 lakh a month through UPI QR codes. Railways, telecom, insurance and fuel are treated separately, at a flat Rs 5 per transaction.
Run the arithmetic on your own order file, because the shape of it matters more than the headline rate. The source gives two worked examples: a Rs 3,000 transaction attracts Rs 12, and a Rs 50,000 transaction attracts Rs 200. Both are 0.4 percent of the full value, not of the excess above Rs 2,000. The cap binds from Rs 75,000, where 0.4 percent is exactly Rs 300, so a Rs 1 lakh transaction costs Rs 300 rather than Rs 400 and the effective rate keeps falling from there.
For most consumer brands the cap is irrelevant and the threshold is everything. The cost is decided by what share of prepaid UPI orders clears Rs 2,000. A brand with baskets around Rs 800 sees no change at all. A brand at Rs 2,500 pays on every order and pays on the whole order. The band just above the threshold is where this lands hardest, because the fee arrives in full the moment a basket crosses it.
Three things to settle before 15 October. Split the last ninety days of UPI settlements either side of Rs 2,000 so you hold a rupee number rather than a rate. Ask your acquirer in writing what it will pass through and from when, since your contract is with the acquirer and not with NPCI. And ask whether GST applies on top of the fee, because the report does not say.
Zane’s analysis draws on original reporting by Entrackr. Read the original report.