Last updated: October 23, 2026. This guide was updated after NPCI postponed the date for the new merchant fee. It explains public announcements and is not financial advice. Check NPCI’s official notices for the final date.
Introduction: What Are the New UPI Rules and Why Was the Date Postponed?
The new UPI rules introduce a Merchant Discount Rate (MDR), a fee that a merchant pays to the bank and payment company that process a UPI payment. It was due to start on 15 October 2026, but NPCI has postponed it. Its UPI and Services Steering Committee said that, keeping the festive season in mind, the MDR on select person-to-merchant (P2M) UPI transactions will be implemented immediately after Diwali, on a date to be notified separately. The fee structure itself has not changed, according to reports.
The short answer on the new UPI rules for most people is no, you will not pay a new fee to send or receive money on UPI. NPCI has said UPI remains free for consumers, and merchants are not allowed to pass the MDR on to customers.
This guide explains the new UPI rules as planned, what the postponement means, worked examples in rupees and what to do if a shop asks you to pay extra.
Table of Contents
Quick Answer
- Have the new UPI rules started? Not yet. The MDR was postponed until after Diwali, and a new date will be notified.
- Is UPI free for customers? Yes. NPCI says UPI stays free for consumers, and apps cannot add platform fees on these payments.
- Who pays the MDR? The merchant, not the customer, on eligible payments above ₹2,000.
- Planned rate: 0.4% on specified P2M payments above ₹2,000, capped at ₹300 for payments of ₹75,000 and above.
- Small merchants receiving up to ₹1 lakh a month through UPI QR codes are planned to stay at zero MDR.
- If a shop asks for extra money because you pay by UPI, you can raise it with your payment app or your bank.
What the New UPI Rules Will Change (When They Start)
| Type of payment | Planned MDR | Notes |
|---|---|---|
| Person to person (P2P) transfers | None | Free for users |
| Payments to merchants up to ₹2,000 | Zero | The large majority of UPI merchant payments, according to NPCI as reported |
| Specified payments to merchants above ₹2,000 | 0.4% | Paid by the merchant |
| Payments of ₹75,000 and above | Capped at ₹300 | 0.4% would otherwise be higher |
| Small merchants receiving up to ₹1 lakh a month by QR | Zero | Continues the zero-MDR support |
| Railways, fuel and similar categories above ₹2,000 | Flat ₹5 | Reported by some sources, so check NPCI’s circular |
| UPI AutoPay and mandates | No prescribed MDR | As reported |
Because the start date is not final, the planned details can still change, so confirm them on NPCI’s website.
Worked Examples of the New UPI Rules
| Payment to a merchant | MDR the merchant pays (planned) | What you pay |
|---|---|---|
| ₹1,500 | ₹0 | ₹1,500 |
| ₹5,000 | ₹20 (0.4%) | ₹5,000 |
| ₹50,000 | ₹200 (0.4%) | ₹50,000 |
| ₹1,00,000 | ₹300 (capped) | ₹1,00,000 |
The last column is the key point under the new UPI rules: you pay only the listed price.
Why Was the Date Postponed?
NPCI said the postponement was decided keeping the festive season in mind. Earlier there had been talk of a later start, but the latest statement says the MDR will come immediately after Diwali. As of 23 October 2026, the reports we checked had not given an exact date.
Practical Tips for Customers Under the New UPI Rules
- Pay the listed price. A shop is not supposed to add a separate UPI fee.
- Keep screenshots and receipts if a shop asks for extra money.
- Report the issue in your payment app or to your bank.
- Follow NPCI and your bank for the final date instead of social media forwards.
What If a Shop Charges You Extra for UPI?
The framework says the MDR is a merchant-side cost and should not be passed on to customers as a separate UPI charge. If a merchant asks you to pay extra for using UPI, you can raise it with the payment app or your bank. Keep a screenshot of the payment and a photo of the bill.
Final Thoughts on the New UPI Rules
The new UPI rules are postponed, not cancelled. For customers nothing changes today: UPI stays free and you pay the listed price. We will update this guide when NPCI announces the date.
Frequently Asked Questions
Is UPI free now?
Yes, for customers. NPCI says UPI remains free for consumers.
When will the new UPI rules start?
NPCI has said the MDR will start immediately after Diwali on a date to be notified separately. No exact date has been announced yet.
Will I be charged after Diwali?
Customers are not meant to be charged. The MDR is a merchant-side fee, and apps and merchants are not allowed to pass it on as a separate charge.
Who pays the MDR?
The merchant pays it, and only on eligible payments above ₹2,000.
Does the postponement change the fee amounts?
Reports say the proposed fee structure has been left unchanged.
Update Log
| Date | Update |
|---|---|
| October 23, 2026 | Rechecked: no new start date had been reported |
| October 16, 2026 | Updated after NPCI postponed the MDR until after Diwali, with a new title and revised details |
| Earlier version | Written when the MDR was due to start on 15 October 2026 |
Sources and Official Links
- NPCI (UPI)
- Ministry of Finance
- Reserve Bank of India
- Business Standard: UPI MDR deferred until after Diwali
- SCC Online: NPCI UPI MDR FAQs explained
Related Guides
Payment problem? See our guide on UPI payment failed but money deducted.