UPI Charges Above ₹2,000
The ₹2,000 threshold applies to merchant (P2M) payments only. Specified merchant transactions above ₹2,000 can attract MDR of 0.4% once NPCI notifies the post-Diwali start date (originally 15 October 2026), capped at ₹300. Person-to-person transfers above ₹2,000 remain free.
UPI MDR explained →What the threshold does and does not cover
| Payment | Above ₹2,000? | Charge position |
|---|---|---|
| Sending ₹10,000 to a friend | Yes | Free — P2P is outside MDR |
| Moving ₹50,000 to your own account | Yes | Free |
| Paying ₹2,500 at a specified merchant | Yes | MDR of 0.4% can apply after the post-Diwali start date (TBA) |
| Paying ₹1,800 at the same merchant | No | No MDR |
| Paying ₹5,000 to an eligible small merchant | Yes | Can remain outside MDR |
Why the confusion spreads
Headlines usually drop the words “merchant” and “specified”. Once those words are removed, a narrow merchant-acceptance charge reads like a universal fee on every UPI payment above ₹2,000 — which it is not. The rate, cap and exemptions are set out on UPI MDR.
Threshold, rate and category treatment
✓ Official source — NPCI UPI circulars · View · Verified 13 October 2026
If you are a customer
- Your P2P transfers are unaffected at any amount.
- The stated position is that UPI users should not be charged the MDR directly.
- If a merchant adds a surcharge for paying by UPI, that is that business's own pricing decision — ask before paying.
If you are a merchant
- Confirm your merchant classification and category with your acquiring bank or aggregator.
- Model the cost on your average ticket size with the charges calculator.
- Remember MDR is a business cost, not a tax — see business payments via UPI.
Sources and verification
Facts on this page are checked against official sources — NPCI, RBI, the Income Tax Department, the Ministry of Finance, PIB and the GST portal. See the full list on the official sources page, the fact-checking process, or report an issue through corrections. Last verified: 13 October 2026.
Related pages
This page is educational information, not professional tax, legal or financial advice. Rules can change — verify against the latest official notification or consult a qualified professional before acting.