Who pays the 0.4% UPI charge from 15 October: the merchant, not the buyer

From 15 October 2026, a 0.4% merchant discount rate applies to specified person-to-merchant UPI payments above Rs 2,000. On a payment of Rs 75,000 or more, the charge is capped at Rs 300. That is the Press Information Bureau release of 15 September, from the Ministry of Finance, and it is repeated in the frequently asked questions published the same day by NPCI and by the Department of Financial Services.

The merchant pays that rate to its acquiring bank. The Department of Financial Services FAQ gives the working example: a Rs 3,000 payment carries Rs 12. The buyer is not the person who pays the rate. The NPCI and Department of Financial Services FAQs say buyers pay only the posted price. Merchants cannot pass the charge on to them. Payment apps cannot add a platform fee on top. Hindustan Times, in its 15 September report, puts the same limit on passing the charge to the buyer. This check did not trace a specific viral post claiming that buyers will be billed extra. The official answer to that claim, in the FAQ, is that they pay the price on the bill.

Two schedules sit beside the 0.4% rate, both in the PIB release. For railways, telecom, insurance, fuel and farm inputs, the charge above Rs 2,000 is a flat Rs 5. For capital-market payments it is 0.02%, capped at Rs 300.

Several payments stay outside the charge. Person-to-person transfers are not charged. Merchant payments up to Rs 2,000 are not charged. A small merchant who receives up to Rs 1 lakh a month through a QR code is not charged. UPI AutoPay mandates are not charged. The PIB release says about 96% of merchant payments are unaffected. Business Standard, on 24 September, reports those same exemptions. India Today's report of 1 October is among the accounts checked for the 15 October start.

What these documents do not settle is what happens after the date. Whether every shop complies is not known yet. Mint reports that the Centre will monitor. Any deferment of the 15 October start is not reported in the material checked. No Reserve Bank of India circular on this charge was found. The court case is also outside these FAQs. Neutral Politics reported separately that on 28 September the Supreme Court refused an interim stay and sought replies in about four weeks. That earlier note is not this one. These FAQs do not record a later order.

Neutral Politics checked the PIB release, the NPCI and Department of Financial Services FAQ PDFs, Business Standard, India Today, Hindustan Times and Mint on 4 October 2026 (IST). This note was posted at 9:44 am IST.

The cover uses illustrative stock photographs from Pixabay, of stacked coins and of a QR code. They are not a photograph of a shop, a bank, or this rule.

What's next

Whether shops follow the rule after 15 October, and whether the court or the Reserve Bank changes it, is not in the 15 September FAQs.