Are There Charges on UPI Payments?
For customers making UPI payments: In general, no. Customers do not pay direct UPI transaction fees. UPI apps (PhonePe, Google Pay, Paytm, BHIM etc.) are free to use for consumers.
For merchants receiving UPI payments: MDR may apply depending on transaction type, amount and merchant category. See the full breakdown below.
UPI Charges Summary
| Transaction Type | Customer Charge | Merchant Charge (MDR) |
|---|---|---|
| P2P (personal transfer) | Zero | Not applicable (no merchant) |
| P2M ≤ ₹2,000 (standard) | Zero | Zero MDR |
| P2M > ₹2,000 (standard) | Zero | 0.4% (max ₹300) |
| Essential sector > ₹2,000 | Zero | ₹5 flat |
| Capital market | Zero | 0.02% (max ₹300) |
Why Do Customers See "No UPI Charges"?
The Government of India mandated zero MDR for UPI standard transactions from January 2020. Banks and PSPs are compensated through a government reimbursement scheme. This means the ecosystem is funded, but customers and most merchants see minimal to zero direct charges for standard UPI payments.
Calculate UPI MDR →Information based on official sources verified as of 18 September 2026. Rules are subject to change. Always verify with NPCI, your bank or a financial advisor. View sources →