From buying groceries to splitting restaurant bills, UPI has become an integral part of daily life in India. However, recent news regarding UPI merchant charges has raised questions about whether digital payments might become more expensive.
The National Payments Corporation of India (NPCI) has deferred the implementation of a new merchant fee structure until after Diwali 2026. A new date for its implementation has not yet been set.
What are the new UPI charges?
This proposed framework relates to certain payments made by customers to businesses, known as 'person-to-merchant' (P2M) transactions.
According to the announced plan, a Merchant Discount Rate of 0.4% could be applied to specific merchant transactions exceeding ₹2,000, though certain limits and exemptions will apply. This fee is intended for the merchant side of the transaction; it is not a direct charge on customers for making UPI payments.
Will you have to pay extra?
This proposed fee does not mean that customers will automatically incur an additional charge every time they scan a QR code.
Private transfers between individuals do not fall under the scope of this merchant-fee framework. The proposed rules also include exemptions for certain small merchants and specific types of transactions.
Nevertheless, customers should keep an eye on the final regulations and any potential adjustments merchants might make to their pricing. The actual impact will depend on the final structure adopted and how merchants choose to respond to it.
Why was the implementation delayed?
This fee structure was originally scheduled to come into effect on October 15, 2026. This has been deferred until after Diwali, giving the payment ecosystem more time to prepare during the busy festive shopping season. The final date is yet to be announced.
What should UPI users know?
For now, there is no reason to assume that a fee will suddenly be applied to every UPI payment. Keep an eye out for official announcements, and—even if someone claims they can help you avoid such charges—never share your UPI PIN or OTP with them.
The core question is not whether a fee exists, but rather which transactions it applies to and who is responsible for paying it.
