Where the 0.4% UPI MDR Goes After 15 October 2026
Published: 3 October 2026
A customer paying ₹3,000 still pays ₹3,000. The new fee does not sit on their screen. From 15 October 2026, a shop on the standard list can lose 0.4% of that bill in settlement. On ₹3,000 that is ₹12. The useful question is not “is UPI free?” It is “who keeps the ₹12?”
The homepage has the rate. This note is only the split, as described in briefings after the 15 September 2026 FAQ. It is not a bank advice slip. Match it to the notice your own acquirer sends.
Who Gets the 0.4% UPI MDR
The reported cut of the fee, not of the bill, is:
| Who | Share of the fee | On a ₹12 fee |
|---|---|---|
| Bank of the person paying | 40% | ₹4.80 |
| Payment gateway | 30% | ₹3.60 |
| UPI app | 20% | ₹2.40 |
| Bank that sponsors the app | 10% | ₹1.20 |
Those four shares add up to the ₹12. They are not four extra charges. PhonePe, Google Pay or Paytm does not get to add a platform fee on top of this. A later circular can move the percentages. Treat the table as reported, not as your settlement file.
What This Is Not
- It is not a tax to the government. The money stays in the UPI chain: banks, the gateway, the app.
- It is not a fee the customer sees. The app should still show the bill amount.
- It is not the same rupee split on a flat ₹5 sector fee. Rail, fuel, telecom and insurance pay ₹5 above ₹2,000, not 0.4%.
- It is not the rule for a RuPay credit card on UPI. That follows card charges.
How a Shop Should Read the Settlement
After 15 October, open one payout. If a line says MDR, recovery, or a fee, compare it with the bill. A standard ₹3,000 payment should be near ₹12 before any GST on that fee. A ₹10,000 payment should be near ₹40. A label does not create a new charge. If the line is larger than the table, ask the bank that issued the QR. This page cannot reverse it.
GST, where briefings have described it, sits on the fee, not on the sale. Eighteen percent of ₹12 is ₹2.16. The calculator on the homepage shows MDR only.