New Delhi, Sept. 16 -- From 15 October, some transactions on the unified payments interface (UPI) will attract a merchant discount rate (MDR)-a fee a merchant pays to the payments ecosystem for processing a digital payment.

An MDR of 0.4% will apply to person-to-merchant (P2M) UPI transactions above Rs.2,000, capped at Rs.300. But you will not be charged any extra fee for using UPI. If your bill at a supermarket comes to Rs.3,000, you scan the QR code and pay Rs.3,000 as usual. The merchant, however, will pay an MDR of Rs.12, or 0.4%, to its bank.

This is not a blanket cost with some categories attracting a lower fee. Railways, telecom, insurance, credit card bills and fuel will attract a flat MDR of Rs.5 for transactions above Rs.2,000...