UPI Payments for Mutual Funds, Stocks to Attract 0.02% MDR From October 15, 2026

The National Payments Corporation of India (NPCI) has announced a new Merchant Discount Rate (MDR) structure for selected UPI transactions, as per news report.  

The new rates will apply from October 15, 2026, with separate charges for different types of merchant payments. 

0.02% MDR on Mutual Fund and Stock Payments 

UPI payments for mutual funds, securities, stockbrokers, dealers and investment platforms will attract an MDR of 0.02%. The charge will be capped at ₹300 per transaction. 

The capital-market category includes payments linked to equity, debt and mutual funds, along with broker wallet top-ups. 

For example, a ₹50,000 payment for an eligible capital-market transaction would attract an MDR of ₹10 at the 0.02% rate. 

0.4% MDR on Larger Merchant Payments 

The standard MDR under the new framework will be 0.4% for eligible person-to-merchant (P2M) UPI transactions above ₹2,000. For payments of ₹75,000 and above, the charge will be capped at ₹300 per transaction. 

A separate flat MDR of ₹5 will apply to payments above ₹2,000 in sectors including railways, telecommunications, insurance, fuel and agricultural inputs. 

P2P Payments Remain Free 

Person-to-person (P2P) UPI payments will not attract MDR, irrespective of the amount transferred. According to the Finance Ministry, such transactions account for around 70% of total UPI transaction value. 

Merchant payments up to ₹2,000 will also remain free. Small merchants under the P2PM category, including street vendors receiving up to ₹1 lakh a month through UPI QR codes, will continue under the zero-MDR framework. 

MDR Applies to Limited Merchant Transactions 

NPCI said the new charges will affect around 4% of merchant transactions. Other transactions either fall below the ₹2,000 threshold or are covered by the existing zero-MDR provisions for small merchants. 

MDR is a merchant-side charge and does not create a separate fee for UPI users. The amount collected will be distributed among banks, payment service providers, and UPI application providers. 

Fund for Small Merchants 

The Finance Ministry will create a fund equivalent to 5% of the MDR collected. The fund is intended to support UPI acceptance and usage among small businesses. 

Read More: UPI Merchant Charges: Who Pays and Who Does Not from October 15, 2026! 

Conclusion 

The framework introduces a 0.02% MDR for eligible capital-market payments and a standard 0.4% rate for larger P2M transactions. P2P payments and qualifying small merchant transactions remain outside the charge. 

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