India, Sept. 23 -- A new Merchant Discount Rate (MDR) framework for UPI payments will come into effect from October 15, 2026, but NRIs using UPI in India will not face a blanket charge on their transactions.

According to the Ministry of Finance, person-to-person (P2P) UPI transactions will remain completely free, regardless of the amount transferred. Payments made to merchants up to Rs.2,000 will also remain free.

The new MDR will apply to specified merchant transactions above Rs.2,000. Importantly for NRIs, the government has clarified that MDR is a merchant-side charge and not a fee imposed directly on customers making UPI payments.

Banks have been advised to ensure that merchants do not pass the MDR on to customers, while UPI apps c...