UPI charges above ₹2,000 delayed until after Diwali: do you pay?
NPCI has put off the 0.4% merchant fee on UPI payments above ₹2,000, due on 15 October 2026, until after Diwali. Customers pay nothing either way.
Shops and businesses will soon pay a fee, called the merchant discount rate or MDR, on some UPI payments they receive. It was due to start on 15 October 2026. The headlines about "UPI charges" have worried a lot of people. Here is who pays what, and when.
Update, 13 October 2026: delayed until after Diwali
On 13 October 2026, two days before the planned start, NPCI said its UPI and Services Steering Committee had decided, "keeping in mind the festive season", that the MDR on select person-to-merchant UPI payments "shall be implemented immediately post Diwali on a date to be notified separately", as reported by Business Standard and PTI. So no merchant fee starts on 15 October 2026.
NPCI did not give the new date. A source told Business Standard that the fee structure itself will not change. Traders' bodies and payment companies had asked for more time because of the festive season, and Reuters had reported on 8 October 2026 that a delay to January 2027 was being considered. We will update this guide when NPCI announces the new date.
Customers pay nothing
When the fee starts, it is charged to the merchant. Merchants are not allowed to pass it on to you, and UPI apps may not add platform fees. If a shop asks for extra money for paying by UPI, that is against the rules.
What is charged
- 0.4% on person-to-merchant UPI payments above ₹2,000, capped at ₹300 a payment. The cap is reached at ₹75,000.
- Railways, telecom, insurance, fuel and utility bills: a flat ₹5 a payment.
- Mutual funds and broking: 0.02%, capped at ₹300.
What stays free
- Every payment of ₹2,000 or less.
- Sending money to another person.
- Small merchants receiving up to ₹1 lakh a month through a QR code.
RuPay credit cards and credit lines on UPI
Payments from a RuPay credit card linked to UPI, or from a pre-sanctioned credit line on UPI, are outside this 0.4% fee. They follow the charges for the credit product, as card payments always have. Your card's rewards and terms do not change because of this rule.
The court case
On 28 September 2026 the Supreme Court refused to stay the fee and asked the Centre, RBI and NPCI to reply within four weeks. So the court has not stopped it, but the case could still change it. The delay announced on 13 October 2026 is NPCI's own decision, not a court order.
What might change for you
Some merchants may nudge you towards payments under ₹2,000, or towards cards, for large bills. Prices should not change. If you see a UPI surcharge, you can complain to your UPI app and the merchant's bank.
Sources: Business Standard: UPI MDR deferred until after Diwali, new date to be notified, Siasat (PTI): Govt postpones charges on UPI transactions over Rs 2,000, Business Today: UPI MDR to be implemented after Diwali, Business Standard: UPI MDR explained, SCC Online: NPCI FAQs on UPI MDR, Business Today: Supreme Court refuses stay, Outlook Business (Reuters): UPI MDR rollout likely to be postponed.
Rules, rates and limits change. Check the official source linked above before you rely on a figure here. Last checked 13 October 2026. Posts never contain referral or affiliate links from the writer.
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