INCOME TAX22 Sept 2026
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From 15 October, a 0.4% merchant discount rate (MDR) applies to person-to-merchant UPI payments above ₹2,000, capped at ₹300. NPCI (National Payments Corporation of India) says over 95% of such payments stay free. Peer-to-peer transfers and recurring payments like bills stay free too. The money funds UPI infrastructure and cybersecurity. Check whether your larger collections now cost slightly more.
Key Statutory Highlights
- NPCI announced a new UPI MDR framework on 15 September, effective 15 October, charging 0.4% only on person-to-merchant (P2M) transactions above ₹2,000, capped at ₹300.
- According to NPCI data, more than 95% of UPI P2M transactions by volume will remain entirely free because they are below ₹2,000, and peer-to-peer transfers plus recurring payments are exempt.
- The revenue is intended to fund UPI infrastructure, cybersecurity and innovation, as volumes are expected to rise from 24 billion to 50 billion transactions within two years.
Actionable Advice for Taxpayers / Founders:If your business collects UPI payments above ₹2,000, review your pricing and settlement records and check with your CA on how these small MDR charges may affect your margins.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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