Highlights
- UPI Charges: The proposed 0.4% merchant fee may not begin on October 15.
- Possible Delay: The rollout could be postponed until January 1, 2027.
- Rs 2,000 Threshold: Selected merchant transactions above Rs 2,000 fall under the proposed framework.
- Free Transfers: Sending money to friends and family will remain free.
UPI Charges From October 15 May Be Delayed: What Happens to Payments Above Rs 2,000?
Millions of Indians using UPI for everyday payments may get more time before the proposed new merchant charges come into effect. The government is considering postponing the implementation of a 0.4% Merchant Discount Rate (MDR) on selected UPI transactions above Rs 2,000, originally scheduled to begin on October 15, 2026.
According to Reuters and other media reports, the rollout could be delayed until January 2027. However, a final decision has not yet been confirmed.
Why Could UPI Charges Be Delayed?
The possible postponement comes amid concerns raised by merchants and payment service providers ahead of India’s festive shopping season.
October to December is a busy period for retailers, with consumers spending heavily on smartphones, electronics, clothing and other products.
Industry participants have reportedly sought additional time to upgrade payment systems and prepare for the new charges. Delaying implementation could help businesses avoid disruption during the festive season.
Will Customers Pay Extra on UPI Payments Above Rs 2,000?
The biggest question for consumers is whether they will need to pay extra when transferring or spending more than Rs 2,000 through UPI.
According to the Finance Ministry’s September clarification, customers will not be charged MDR for making UPI payments. The fee applies to eligible merchants receiving payments.
Under the announced framework, selected merchant transactions above Rs 2,000 will attract a 0.4% MDR, capped at Rs 300 for payments of Rs 75,000 or more.
For example, an eligible merchant receiving Rs 10,000 through UPI would incur a fee of Rs 40. This does not mean the customer must pay Rs 40 extra.
Which UPI Transactions Will Remain Free?
The government has clarified that person-to-person transfers will remain completely free, regardless of the amount.
Payments to merchants up to Rs 2,000 will also remain free. Small merchants covered by the zero-MDR framework will continue to receive payments without the proposed fee.
According to the government, approximately 96% of merchant transactions will remain unaffected.
What Happens Next?
The National Payments Corporation of India (NPCI) is expected to decide whether to postpone the implementation date.
Reports suggest January 1, 2027, as a possible revised launch date, but this remains subject to confirmation.
For now, consumers can continue using UPI for everyday transactions without paying the proposed MDR. The final implementation schedule will determine when eligible merchants begin paying the new fee.
