UPI Charges Above ₹2,000: What’s Changing?

The Supreme Court has refused to put an interim stay on the Centre’s decision to introduce a 0.4% Merchant Discount Rate (MDR) on specified person-to-merchant (P2M) UPI transactions above ₹2,000. The court has asked the Centre, RBI and NPCI to respond to a petition challenging the move.

What does it mean?

Under the proposed framework, the MDR is scheduled to take effect from October 15, 2026. The charge applies to eligible merchant payments above ₹2,000—not ordinary UPI transfers between individuals. The MDR is capped at ₹300 for transactions of ₹75,000 or more.

The Centre has told the Supreme Court that 96% of users would be exempt from the MDR. It has also said the government itself will not receive the money, describing the MDR as a settlement charge within the payment ecosystem.

The move has raised concerns among some businesses about additional costs and whether merchants could pass those costs on to consumers. The legal challenge is still pending, and the Supreme Court has not yet given a final ruling on the validity of the MDR framework.

In simple terms: UPI is not becoming chargeable for everyone. The proposed 0.4% MDR concerns specified merchant transactions above ₹2,000, while person-to-person UPI payments remain free.