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Can shopkeepers charge extra for UPI payments? Know the facts
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News18•13-10-2026, 15:26
Can shopkeepers charge extra for UPI payments? Know the facts
- •Shopkeepers cannot pass on the Merchant Discount Rate charges to customers for making UPI payments.
- •An MDR of 0.4 percent will apply to certain P2M transactions exceeding Rs 2,000, but it must be borne by merchants, not customers.
- •The Ministry of Finance and NPCI have clarified that general UPI transactions and P2P transfers remain completely free for users.
- •Transactions of Rs 2,000 or less and payments to small businesses under specific thresholds will have zero MDR.
- •Customers only need to pay the actual price of the item and should ask for a bill if extra money is demanded.
Key Questions Answered
No. The National Payments Corporation of India and the Ministry of Finance have clearly stated that merchants cannot pass MDR charges onto customers, and you only need to pay the actual price of the item.
An MDR of 0.4% applies to certain Person-to-Merchant UPI transactions exceeding Rs 2,000, with a maximum charge limit of Rs 300 for transactions of Rs 75,000 or more.
Yes. UPI remains entirely free for general customers, and all Person-to-Person transactions—such as sending money to friends or between your own bank accounts—will remain free regardless of the amount.
