India’s digital payment system is set for a major change, with the National Payments Corporation of India (NPCI) introducing a 0.4% Merchant Discount Rate (MDR) on specified merchant UPI transactions above ₹2,000 from October 15, 2026. The charge will apply to merchants rather than ordinary consumers. Person-to-person UPI transfers will remain free regardless of the amount, while payments to small merchants covered under the zero-MDR framework will also remain free. The government says about 96% of merchant UPI transactions will remain unaffected. The revised framework is intended to support the long-term operation, security and expansion of India’s digital payments infrastructure
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