NPCI (National Payments Corporation of India) has announced a new framework for the commercial fee of UPI transactions that will come into effect on October 15, 2026. Under this framework, UPI transactions exceeding 2000 rupees will incur a fee rate of 0.4 percent, with a maximum fee capped at 300 rupees per transaction.
Details of UPI Transaction Fees
The fee rate of 0.4 percent is applicable for Person-to-Merchant (P2M) transactions above 2000 rupees. For example, the fee for a 2000 rupee transaction will be 8 rupees. However, this fee will be charged unilaterally from the merchant, and consumers will still be able to use UPI services for free.
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The new fee framework exempts Person-to-Person (P2P) transactions and P2M transactions below 2000 rupees from fees. Additionally, small merchants operating under the Person-to-Person Merchant (P2PM) framework will benefit from zero fees. This category includes small merchants receiving up to 100,000 rupees per month from QR UPI payments to their bank accounts.
Impact on Specific Categories and Small Transactions
For specific categories of merchants, including rail services, telecommunications, insurance, and fuel, a fixed fee of 5 rupees is set for transactions above 2000 rupees. According to NPCI, there will be no impact on small UPI transactions up to 2000 rupees for all merchants, as these transactions account for over 95 percent of total P2M UPI transactions.
The new framework is designed to expand UPI acceptance, encourage continued usage, and accelerate the integration of small businesses into India's digital payment ecosystem. NPCI has stated that reasonable fees for high-value transactions will be distributed among UPI ecosystem players and will assist in expanding UPI to new users and merchants, as well as investing in resilient infrastructure, cybersecurity, and innovation.
Ultimately, the new UPI fee rate is still lower than the costs associated with other digital payment tools, including credit cards, debit cards, and wallets.
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