Tech news · 18 Sep 2026
UPI merchant fee starts on 15 October 2026: what small businesses should check
A 0.4% merchant fee is set to apply to certain UPI payments above ₹2,000 from 15 October 2026. Customers pay nothing, and the smallest merchants stay at zero.
From 15 October 2026, a merchant fee (MDR) is due to apply to some UPI payments that businesses receive, according to an explainer from Kotak Mahindra Bank citing NPCI.
What changes
- Payments up to ₹2,000: no fee.
- Specified merchant payments above ₹2,000: a fee of 0.4%.
- Payments of ₹75,000 or more: the fee is capped at ₹300 for each transaction.
- Small merchants in the person-to-merchant category receiving up to ₹1 lakh a month continue at zero.
- Customers are not charged for paying by UPI.
The ₹2,000 figure is a threshold for the fee, not a new limit on how much can be paid.
What to do
Ask your bank or payment provider which category your account falls into and what you will be charged. If you take many payments above ₹2,000, work the fee into your prices or margins before the date. Check that your billing software records the fee, so your books match your bank statement.
Source: Kotak Mahindra Bank explainer, citing NPCI