Ordinary customers will continue using UPI without paying merchant processing fees under the revised framework. The rules take effect on 15 October 2026, with exemptions covering several everyday transactions.<\/p>\n
The merchant discount rate (MDR) is a fee linked to accepting digital payments. Customers paying businesses will not bear this charge, according to the Finance Ministry. Here are 5 situations where MDR does not apply.<\/p>\n
Sending money to friends and family<\/p>\n
Personal transfers remain free, regardless of the amount sent. This includes sending money<\/a> to parents, helping relatives or settling everyday expenses with friends.<\/p>\n These are called person-to-person transfers because money moves directly between individuals. The revised merchant fee rules do not introduce charges for these payments.<\/p>\n Paying eligible small merchants<\/p>\n Street vendors and eligible neighbourhood shops will continue receiving payments without MDR. This covers small merchants who receive up to \u20b91 lakh per month via UPI QR codes.<\/p>\n They must fall under the specified Person-to-Person-Merchant category to qualify for this exemption. All their transactions remain exempt under this category, helping protect smaller businesses from additional costs.<\/p>\n Making purchases up to \u20b92,000<\/p>\n