Is UPI Free After 15 October 2026? What Users Should Know

Will UPI become free after 15 October 2026?

Short answer: Yes, if you are a customer. Sending money or paying at shops will continue to be free for UPI users. What changes from 15 October 2026 is a small fee paid by merchants on certain payments above ₹2,000.

What exactly will change on 15 October?

A Merchant Discount Rate (MDR) of 0.4% will be applicable on certain person-to-merchant (P2M) UPI payments above ₹2,000 from 15 October 2026. The fee is paid by the merchant to the payment system. This is not added to your bill.

For the full lowdown on limits and safety tips, check out our guide to the new UPI rules from 15 October 2026.

Which UPI Payments Are Free?
Free: sending money to friends and family (peer-to-peer)
Under new framework, no MDR to pay up to ₹2,000 to a shop.
No MDR on payments like subscriptions, bills via UPI AutoPay
Small merchant payments: exempt in the framework.
When does the 0.4% charge occur?
This is for eligible merchants who get a UPI payment of more than ₹2,000. The merchant pays. Sort of like:

You go to a store and pay ₹3000. Merchant pays ₹12 MDR and you pay ₹3,000.
You pay 1,500 in the store. No MDR.
What if a shop asks for an extra “UPI charge”?
You will not have to pay any additional UPI charge on your bill owing to this change. If you find a store charging you extra for using UPI, you can politely ask them about it, pay through some other means or report it to your bank or UPI app.

FAQ
Will I be charged for money transfer on UPI?
No. P2P UPI transactions will remain free.

Do I pay the 0.4% MDR? No. The MDR is paid by the merchant and not by the customer.

Does small payment below ₹ 2,000 gets affected?
Nope. No MDR on payments up to ₹ 2,000 to merchants.

Where can I find the official rules?
Check NPCI site, RBI notices and your bank or UPI app. Rules are subject to change, so always check official sources.

This article is for general information purposes only and is not financial or legal advice.