What happened
Finance Ministry issued Gazette S.O. 5067(E) on Sept 14, 2026 under Section 10A, capping free UPI merchant transactions at ₹2,000. From Oct 15, merchants pay 0.4% above that, capped at ₹300 above ₹75,000.
Why it matters
Over 95% of merchant tickets under ₹2,000 remain free; P2P transfers and small P2PM vendors are untouched. Congress alleges the move opens the door to consumer charges under US pressure.
Remember this
UPI is not free for businesses anymore — but your personal transactions and small vendor payments stay protected.
More context & who is affected
The Finance Ministry's Gazette S.O. 5067(E) dated September 14, 2026 under Section 10A caps free UPI merchant transactions at ₹2,000. From October 15, merchants pay 0.4% above that, capped at ₹300 for payments above ₹75,000.
Consumers are shielded — P2P transfers stay free at every amount, and 95% of merchant tickets under ₹2,000 are untouched. RuPay debit cards remain free at any amount.
Congress alleges the fee opens the door to consumer charges under US pressure. Finance Minister Sitharaman clarified MDR applies only to merchants; the NPCI steering committee has not finalized the framework yet.
- Gazette notification
- S.O. 5067(E), Sept 14 Issued under Section 10A of PSS ActThe Hindu
- Merchant fee
- 0.4% above ₹2,000 Capped at ₹300 above ₹75,000The Hindu
- Tickets affected
- ~4% above ₹2,000 Carry ~two-thirds of merchant valueThe Hindu
Timeline
- Aug 2026 — PSS Act amendment passed in Monsoon Session
- Sept 14, 2026 — Gazette S.O. 5067(E) issued
- Oct 15, 2026 — Merchant fees effective
Merchants
Merchants above ₹2,000 per transaction will pay 0.4% MDR from October 15.
General Public
Over 95% of UPI tickets under ₹2,000 remain free for consumers; P2P transfers unaffected.
Merchants
Jefferies estimates ₹5,000-10,000 crore annual revenue from the fee structure.
Reporting fromThe Hindu ↗Daily Jagran ↗
Sources & verification2 sources · 4 claims
These are the records behind this briefing. Linked reporting is not the same as independent confirmation.
- The HinduReporting
They called it a gift, then I sat with the gazette: Prakash Raj on UPI fee ↗
Published Sep 20, 2026 · Accessed Sep 20, 2026 - Daily JagranReporting
Is UPI Still Free? What Happens When You Send More Than Rs 2,000? ↗
Published Sep 20, 2026 · Accessed Sep 20, 2026
Claims and linked sources
Finance Ministry issued Gazette S.O. 5067(E) on September 14, 2026 under Section 10A of the Payment and Settlement Systems Act, capping free UPI merchant transactions at ₹2,000.
From October 15, merchants will pay a 0.4% fee on UPI payments above ₹2,000 (capped at ₹300 for payments above ₹75,000).
Only about 4% of merchant tickets sit above ₹2,000, but they carry about two-thirds of merchant value; over 95% of merchant tickets are ₹2,000 or less.
Person-to-person transfers remain free at every amount and account for roughly 70% of total UPI value; small vendors tagged as P2PM under ₹1 lakh/month also stay exempt.
