New UPI Rules From October 15: These 7 Transactions Will Still Have Zero MDR Charges
New UPI Rules From October 15: These 7 Transactions Will Still Have Zero MDR Charges
Gangtok, September 18 : Starting next month, UPI users across India will see a revised charge structure come into effect, but everyday payments will largely stay unaffected. Under the new framework announced for October 15, Person-to-Merchant (P2M) UPI transactions below Rs 2,000 will continue to be completely free for consumers, with no Merchant Discount Rate (MDR) applied.
However, larger P2M transactions above Rs 2,000 will now attract a 0.4 percent MDR, capped at a maximum of Rs 300 per transaction. In select merchant categories such as railways, telecom, insurance, and fuel, a flat MDR of Rs 5 per transaction will apply once the payment crosses Rs 2,000.
Despite this shift, the majority of routine UPI payments made by common users will remain untouched by the new charges. Here are the seven categories of transactions that will continue to stay free of MDR under the revised rules.
Person to person transfers will remain completely free for both the sender and the receiver, and this includes self-transfers made between an individual's own linked bank accounts.
Small merchants collecting up to Rs 1 lakh a month through UPI QR codes will continue to enjoy zero MDR on every transaction they receive, regardless of transaction size within that threshold.
These small merchants will not be required to register for GST in order to qualify for the zero-MDR benefit under the P2PM tier, as long as their monthly collections stay within the Rs 1 lakh limit.
Small-ticket purchases, meaning any P2M transaction up to Rs 2,000, will stay free of MDR across all merchant categories, keeping day-to-day shopping and small payments cost-free.
UPI AutoPay transactions, which cover automated recurring payments such as utility bills, subscriptions, and investment instalments, will also continue without any MDR charges.
Payments made on essential services, specifically transactions under Rs 2,000 in the railways, telecom, insurance, and fuel sectors, will remain exempt from MDR.
QR code payments made to P2PM merchants in rural and semi-urban areas will continue to attract zero MDR, including for transactions that fall under the Rs 2,000 threshold exemption.
On the transaction limit front, there are no monthly caps or volume restrictions for individual consumers making free UPI payments. Daily transaction limits, however, vary by category and range between Rs 1 lakh and Rs 5 lakh, with standard person-to-person transfers capped at Rs 1 lakh per day.
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