Quick answer
- ₹2,000 is the threshold for the new merchant fee, not a limit on what you can pay.
- Above ₹2,000 at a specified merchant: 0.4% MDR, paid by the merchant.
- At or below ₹2,000: nothing changes.
- Consumers pay ₹0 extra either way.
What does ₹2,000 mean in the new rule?
₹2,000 is the threshold. Only specified merchant (P2M) payments above this amount attract the new 0.4% MDR. A payment of exactly ₹2,000 is not covered.
It is not a cap on UPI payments. You can still pay larger amounts up to your bank's daily UPI limit.
UPI charges above ₹2,000: worked examples
₹2,001: MDR of roughly ₹8, paid by the merchant. ₹5,000: ₹20. ₹10,000: ₹40. ₹50,000: ₹200. ₹75,000 and above: capped at ₹300. In every case, the customer's account is debited the exact bill amount.
Will shops split bills to stay under ₹2,000?
Some may try. Whether that is permitted depends on the merchant's agreement with its payment provider and NPCI's rules on transaction splitting. It does not affect the customer either way.
Who pays the charge above ₹2,000?
The merchant, through its payment provider. See who pays UPI merchant charges for how the fee flows between the merchant, the bank and the payment app.
Bottom line
Above ₹2,000 at a specified merchant, the merchant pays 0.4% (max ₹300). Below it, nothing changes. As a customer, you never pay more than the bill.
Check the MDR on your own amount
Estimated MDR
₹40
Paid by the merchant. The customer is not charged.
- Transaction amount
- ₹10,000
- MDR rate
- 0.4%
- Merchant receives
- ₹9,960
- Customer pays extra
- ₹0
Frequently asked questions
01Is there a charge on UPI payments above ₹2,000?
Yes, for specified merchants only: a 0.4% MDR paid by the merchant, capped at ₹300. The customer is not charged.
02What is the charge on a ₹2,000 UPI transaction?
Nothing. The MDR applies only above ₹2,000, so ₹2,000 exactly is not covered.
03Can I still pay more than ₹2,000 through UPI?
Yes. ₹2,000 is a fee threshold for merchants, not a payment limit. Your bank's daily UPI limit, usually ₹1 lakh, still applies.
Sources
- MediaReuters — India payments authority sets 0.4% fee on UPI merchant payments above ₹2,000
- MediaTimes of India — What MDR on P2M UPI transactions above ₹2,000 means for you
- OfficialPress Information Bureau — Government clarification: no charges for consumers on UPI
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