UPI Extra Charge Rules 2026: To promote digital transactions across the country, the government and the National Payments Corporation of India (NPCI) have established clear rules stating that UPI payments remain completely free for customers. Specifically, under the rule effective from October 15, 2026, a Merchant Discount Rate (MDR) of 0.4% applies to large merchant payments exceeding ₹2,000.

However, this charge must be paid by merchants to their respective banks or payment gateways. The Ministry of Finance has issued strict directives to banks ensuring that merchants do not pass the burden of this MDR onto customers. Consequently, if a merchant or shopkeeper demands an extra service charge for a UPI transaction exceeding ₹2,000, it constitutes a legal offense. The government and NPCI have explicitly clarified in their guidelines that UPI payments are entirely free for customers; no merchant is permitted to extract even a single extra rupee from a customer. If a merchant forcibly demands extra money for a UPI payment or refuses to accept the payment, you can initiate strict legal action against them using the methods outlined below.

**4 Steps to Take If a Shopkeeper Demands Extra Charges**

Clearly inform the shopkeeper that, according to NPCI and RBI guidelines, collecting merchant charges from customers is strictly prohibited. Then, navigate to the 'Help & Support' section of your payment app. File a complaint by selecting the option related to "Merchant asking for extra charges" and provide the merchant's QR code or transaction ID.

**File an Online Complaint on the NPCI Portal**

If a shopkeeper refuses to accept UPI payments or demands extra charges, visit the official NPCI website at npci.org.in. Click on 'UPI Complaint' under the 'Get in Touch' option. Next, select 'Person to Merchant (P2M)' under the transaction category, enter the merchant's name and details, and submit the report. Call the National Consumer Helpline

If a shopkeeper charges extra or behaves rudely, you can file an online complaint against the merchant by calling the toll-free number 1915 or using the UMANG App.

Quick overview of UPI extra charge rules

Criteria    Rules and Provisions

Consumer Charges    100% Free

MDR Implementation Date    15 October 2026

Who is MDR for? Only for merchants.

Helpline Number    National Consumer Helpline Number: 1915

Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.