What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
For customers, UPI payments are meant to remain free: a merchant-side MDR (merchant discount rate) is not automatically a fee to the person paying. A Department of Financial Services (DFS) FAQ dated 15 September 2026 says a new merchant MDR framework is due to start on 15 October 2026. Because that start date is still in the future as of 4 October 2026, treat the rates below as announced provisions, not charges already in force.
Does UPI charge the customer?
The DFS FAQ says consumers will not be charged for UPI services under its announced framework. It says person-to-person (P2P) transfers remain free for both sender and recipient, UPI apps may not add a platform fee for UPI payments, and merchants may not pass MDR on to customers as a UPI surcharge. These are statements in the FAQ about the framework it says will take effect on 15 October 2026; they do not by themselves establish that the framework is already operative.
NPCI separately says a customer or PPI holder pays no charge for transactions using a prepaid payment instrument (PPI, such as a wallet) on UPI, including when receiving a payment. In a March 2023 clarification, NPCI said interchange on PPI merchant transactions did not create a customer charge, and bank-account-to-bank-account UPI remained free. An interchange or MDR charged on the merchant side should not be mistaken for a fee deducted from the payer’s transfer. NPCI UPI FAQ · NPCI’s March 2023 clarification
What merchant MDR does the DFS FAQ announce?
The DFS document, titled “Merchant Discount Rate (MDR) on Select UPI (P2M) Transactions: Frequently Asked Questions,” is dated 15 September 2026 and states a commencement date of 15 October 2026. The table summarizes its announced rates; it is not confirmation that a separate operative notification has taken effect.
The Tool Desk
Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →#1 Best Overall
| Payment or merchant case | Announced MDR in the DFS FAQ | Qualification |
|---|---|---|
| General P2M transaction up to ₹2,000 | No MDR | As stated in the FAQ; framework start date is 15 October 2026. |
| General P2M transaction above ₹2,000 | 0.4% | FAQ says MDR is capped at ₹300 for transactions of ₹75,000 or more. |
| Specified sectors, including railways, telecom, insurance and fuel | ₹5 flat MDR | For transactions above ₹2,000, according to the FAQ. |
| Capital-market transactions | 0.02%, capped at ₹300 | As described in the FAQ. |
| P2PM small merchants | Zero MDR | FAQ describes P2PM classification as up to ₹1 lakh in monthly UPI QR collections directly into the merchant’s account. |
P2M means person-to-merchant; P2PM refers to the small-merchant classification used in the FAQ. The FAQ says that classification depends on the merchant’s overall account status: one payment above ₹2,000 does not alone make an otherwise exempt P2PM merchant liable under the general P2M MDR. It also says the NPCI UPI and Services Steering Committee decides operational parameters, fee-distribution models and category caps. Detailed arrangements for a small-merchant fund are described as still to be finalized in consultation with RBI.
Who may pay the merchant-side fee?
MDR is a merchant-side acceptance charge, not a UPI surcharge the customer is allowed to pay under the announced DFS framework. The FAQ says merchants cannot pass MDR through to buyers and that UPI apps cannot levy a platform fee for UPI payments. It does not mean every merchant category has the same announced MDR: transaction amount and merchant classification both matter, as the table shows.
Rank #2
- Ideal for Gifting
- Ideal for a bookworm
- Compact for travelling
Why do older sources say UPI is free?
The government’s DFS FY 2025–26 annual report records the earlier policy that, from 1 January 2020, no charge including MDR was payable on RuPay debit-card and BHIM-UPI payments. The report also describes time-limited government incentive schemes for RuPay and low-value BHIM-UPI merchant payments. That history helps explain older statements that all UPI is free, but it does not settle whether the later-announced 2026 MDR provisions have been separately finalized and implemented. DFS annual reports
Quick Recap
Best Value
- It can be a gift option
- Comes with secure packaging
- Helpful in various ways
Rank #4
What to do if a merchant adds a UPI fee
- Check whether the charge is being added to your payment or is a merchant-side fee. Under the DFS FAQ’s announced framework, merchants may not pass MDR to customers as a UPI surcharge.
- Keep the bill and payment confirmation if a separate UPI fee appears, and ask the merchant to identify the charge before completing payment.
- Check current notices from the Ministry of Finance, RBI and NPCI for any operative notification or change after the FAQ’s 15 September 2026 publication. The FAQ alone is not proof that its future-dated framework is already in force.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
