RBI Governor Sanjay Malhotra said a small fee on UPI transactions will not have a major impact on volumes. The NPCI plans to introduce a 0.4 per cent charge on merchant payments above ₹2,000 from October 15. This change aims to support infrastructure, innovation, and cybersecurity across the digital payment ecosystem.
The Reserve Bank of India does not expect the small fee on UPI (Unified Payments Interface) transactions to have a major impact on transaction volumes.
“Already a decision has been taken (on merchant discount rate/MDR). As of now, we do not see any drop in volumes. And I personally don’t think that a small fee will have a major impact on the volumes,” RBI Governor Sanjay Malhotra said.
The National Payments Corporation of India (NPCI) plans to introduce an MDR of 0.4 per cent on person-to-merchant (P2M) UPI transactions above ₹2,000. For transactions of ₹75,000- and above, the MDR will be capped at ₹300 per transaction. These charges will come into effect from October 15.
The MDR is distributed only amongst the UPI ecosystem, to further invest into infrastructure resiliency, innovation, cybersecurity (protecting the UPI Infrastructure with banks and non-banks) and customer service.
According to NPCI, there is no impact on small-value UPI transactions up to ₹2,000, which comprise more than 95 per cent of the total volume of UPI (P2M) transactions. As per latest data, UPI processed 2,407 crore transactions valued at ₹29.37 lakh crore. in September 2026