UPI merchant fees begin October 15; customers remain unaffected

UAE-based Indians will continue using the Unified Payments Interface (UPI) without paying transaction fees when India's new Merchant Discount Rate takes effect on October 15, 2026. The new charge applies to eligible merchants accepting UPI payments above Rs2,000 and does not apply to the customer making the payment. India is introducing a Merchant Discount Rate, or MDR, of 0.4 per cent on selected person-to-merchant UPI payments above Rs2,000. The charge will be capped at Rs300 when the payment reaches Rs75,000. A transaction of exactly Rs2,000 will remain free because the MDR applies only when the value exceeds that threshold. India's Finance Ministry has said merchants cannot pass the MDR to buyers. UPI app providers are prohibited from imposing a platform fee or another charge on customers making UPI payments. Person-to-person transfers, including payments to relatives, will remain free.