New Delhi, Oct. 6 -- India's Unified Payments Interface (UPI) will move away from its zero-MDR model for a limited set of merchant transactions from 15 October 2026. A 0.4% Merchant Discount Rate (MDR) will apply to specified person-to-merchant (P2M) UPI payments above Rs.2,000, while consumers will continue to make UPI payments without paying MDR.

The government says the framework is intended to support the long-term sustainability of the UPI ecosystem, including investment in infrastructure, innovation, cybersecurity and customer service. MDR is a merchant-side payment ecosystem charge and will be shared among participants such as banks, payment service providers and UPI application providers. It is not a tax collected by the governmen...