- Will I have to pay a charge when I make a UPI payment?
No. The new Merchant Discount Rate (MDR) is a charge within the merchant payment ecosystem and is not a charge on customers making UPI payments.
- Will UPI payments of ₹2,000 or less remain free?
Yes. UPI transactions up to ₹2,000 will continue to have zero MDR. More than 95% of P2M UPI transactions fall within this category.
- Will I be charged extra if I pay more than ₹2,000 to a shop or business?
No. For eligible P2M UPI transactions above ₹2,000, the MDR is charged to the merchant. Merchants cannot pass this MDR charge on to customers while accepting UPI payments.
- What happens when I pay my child’s school fees through UPI?
Educational fee payments, including school tuition, university fees and institutional entrance examinations, are covered under the designated Industry Programme category. Payments up to ₹2,000 remain free of MDR, while payments above ₹2,000 will have the applicable flat-fee structure or capped processing rate.
- Will I have to pay a UPI charge when paying electricity or water bills?
No direct charge is imposed on the customer. Government utility payments such as electricity and municipal water charges above ₹2,000 have a flat concessional MDR of ₹5 instead of the standard 0.4% rate. Payments below ₹2,000 have zero MDR.
- What if I make a UPI payment of ₹75,000 or more?
The MDR for eligible merchant transactions of ₹75,000 and above is capped at ₹300 per transaction. This charge is part of the merchant payment ecosystem and is not directly charged to the customer.
- Will person-to-person UPI transfers be affected?
No. Person-to-person (P2P) UPI transactions remain free, irrespective of the amount transferred.
- Will UPI payments made using a RuPay credit card be covered by these MDR rules?
Credit-linked UPI payments, including RuPay credit cards linked to UPI and pre-sanctioned bank credit lines, operate under separate credit-product rules. The MDR framework applies specifically to direct account-to-account P2M UPI transactions.
- Will paying for fuel through UPI attract a charge?
For fuel purchases above ₹2,000 made through UPI at petrol pumps, a flat MDR of ₹5 applies within the merchant payment ecosystem. Fuel payments below ₹2,000 have zero MDR.
- Will customers have to pay more because of the new MDR?
No. Merchants covered by the framework cannot pass the MDR charge on to customers while accepting UPI payments. Customers will continue to pay the listed price for goods and services.
11. How is UPI MDR different from MDRs on debit and credit cards?
According to a moneycontrol report, UPI MDR is structured much lower than the fees applied on traditional card-based transactions. Standard credit card MDRs typically range between 1.5% and 2.5% per transaction. Debit card MDRs are capped up to 0.90%. But as per the new rule, UPI remains the most affordable digital payment acceptance tool for commercial enterprises.
12. Compare it with international payment systems?
According to reports, most global payment systems (including Digital Public Infrastructures) have economic models that support infrastructure and innovation. As per the new norm, the approach adopted by India aims at prioritising accessibility, the scale and its inclusion into daily transactions done by people from all walks of life.
