![\"5](\"https:\/\/trak.in\/stories\/wp-content\/uploads\/2026\/09\/Screenshot-2026-09-06-at-2.44.33-PM-1-1.png\")
<\/figure>\n\n\n\nUnder the new framework, transactions above Rs 2,000 in five specific categories will attract a flat Rs 5 MDR instead of the standard percentage-based charge.<\/p>\n\n\n\n
Which Five Categories Will Attract Rs 5 MDR?<\/strong><\/p>\n\n\n\n The new framework identifies five categories where UPI merchant transactions above Rs 2,000 will attract a flat Rs 5 MDR.<\/p>\n\n\n\n These categories are:<\/p>\n\n\n\n The decision creates a separate pricing structure for these sectors, where merchants will pay a fixed Rs 5 instead of the standard MDR applicable to other eligible transactions.<\/p>\n\n\n\n For example, if a customer makes a Rs 10,000 eligible payment for a railway service through UPI, the merchant-side MDR would be Rs 5 rather than Rs 40 under a 0.4% MDR.<\/p>\n\n\n\n Customers Will Not Directly Pay the MDR<\/strong><\/p>\n\n\n\n One of the most important aspects of the new system is that the MDR is a merchant-side charge.<\/p>\n\n\n\n Customers making UPI payments will not be directly charged the Rs 5 MDR. Banks have also been advised to ensure that merchants do not pass the MDR cost on to customers.<\/p>\n\n\n\n This means a customer making an eligible Rs 3,000 payment should continue to pay Rs 3,000, while the applicable MDR is handled within the merchant payment ecosystem.<\/p>\n\n\n\n What About Other UPI Payments Above Rs 2,000?<\/strong><\/p>\n\n\n\n For other eligible person-to-merchant UPI transactions above Rs 2,000, the standard MDR will be 0.4%.<\/p>\n\n\n\n The charge will be capped at Rs 300 for transactions of Rs 75,000 or more. Transactions of Rs 2,000 or less will continue without MDR.<\/p>\n\n\n\n Person-to-person UPI transfers will also remain free, regardless of the amount involved. Therefore, transferring Rs 5,000 to a friend or family member will not attract the new MDR.<\/p>\n\n\n\n Most UPI Transactions Will Remain Unaffected<\/strong><\/p>\n\n\n\n The new framework is expected to have an impact on only a relatively small portion of UPI transactions.<\/p>\n\n\n\n According to the government, around 96% of merchant transactions will remain unaffected, with the new MDR applying to approximately 4% of transactions.<\/p>\n\n\n\n Small merchants receiving up to Rs 1 lakh per month through UPI QR codes under the Person-to-Person-Merchant category will also continue to receive zero MDR on their transactions.<\/p>\n\n\n\n What the New UPI Rules Mean<\/strong><\/p>\n\n\n\n The new MDR framework introduces a cost for certain merchant transactions while keeping direct charges away from consumers.<\/p>\n\n\n\n For users, the key distinction is between merchant payments and person-to-person transfers. Payments to friends and family will remain free, while eligible merchant transactions above Rs 2,000 will follow the revised MDR structure from October 15, 2026.<\/p>\n\n\n\n The introduction of the flat Rs 5 charge for railways, telecommunications, insurance, fuel and agricultural inputs also creates a different cost structure for these sectors compared with other eligible merchant transactions.<\/p>\n","protected":false},"excerpt":{"rendered":" India\u2019s UPI payment ecosystem is set for a significant change from October 15, 2026, with the introduction of a Merchant Discount Rate (MDR) on selected high-value merchant transactions. However, not every UPI payment above Rs 2,000 will attract the same charge. Under the new framework, transactions above Rs 2,000 in five specific categories will attract […]<\/p>\n","protected":false},"author":30,"featured_media":1313942,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[7418,41],"class_list":["post-1313936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-mdr","tag-upi"],"acf":[],"yoast_head":"\n\n