Do UPI payments have charges for consumers?
UPI payments remain free for everyday consumers. A new Merchant Discount Rate (MDR) framework from the National Payments Corporation of India (NPCI) applies only to eligible merchants, starting 15 October 2026, and the Ministry of Finance has confirmed it must not be passed on to customers. Here is what stays free for you:
- Person-to-person transfers cost nothing, for any amount.
- All merchant purchases up to Rs. 2,000 by QR code or online are free.
- Regular bank-to-bank UPI apps do not charge extra fees to users.
The new charges apply only to businesses, not buyers. From 15 October 2026, eligible merchants face the following:
- General merchants pay a 0.4% MDR on transactions above Rs. 2,000, capped at Rs. 300 for payments of Rs. 75,000 and above.
- Sectors such as fuel and railways carry a flat Rs. 5 charge on transactions above Rs. 2,000.
- Small businesses earning up to Rs. 1 lakh a month, or those in designated rural and semi-urban areas, keep zero-MDR protection.
This charge is borne by the business, not the buyer, so it does not reach your bank account. Everyday users continue to send money and pay small merchants free of charge. Knowing these rules helps you use UPI with full clarity on when charges apply.
What is the UPI transfer limit per day?
The UPI transfer limit per day is set by NPCI at Rs. 1 lakh per transaction and per day for standard person-to-person and person-to-merchant payments, with a cap of 20 transactions in 24 hours. Banks may set a lower limit within this, and some merchant categories have higher limits, as the table shows.
| Bank | Daily P2P limit | Daily P2M limit | Special category limit |
|---|---|---|---|
| SBI | Rs. 1 lakh | Rs. 1 lakh | Up to Rs. 5 lakh for specified categories |
| HDFC Bank | Rs. 1 lakh | Rs. 1 lakh | Rs. 2 lakh for capital markets, Rs. 5 lakh for IPO |
| ICICI Bank | Rs. 1 lakh | Rs. 1 lakh | Up to Rs. 5 lakh for specified categories |
Your exact UPI transaction limit depends on your bank and account type, so check it in your UPI app under your linked bank account, or in your bank's net banking or mobile app.
What is the interchange fee on UPI?
The interchange fee on UPI is a charge that applies when a merchant is paid through a Prepaid Payment Instrument (PPI), such as a wallet, rather than directly from a bank account. Set within the NPCI framework and paid between the merchant's acquiring bank and the PPI issuer, it does not reach you as the customer.
| Transaction type | Applicable? | Fee rate | Who pays? |
|---|---|---|---|
| P2P bank-to-bank UPI | No | 0% | Not applicable |
| P2M bank-account UPI up to Rs. 2,000 | No | 0% | Not applicable |
| P2M PPI-funded UPI above Rs. 2,000 | Yes | Up to 1.1% | Merchant's acquiring bank and PPI issuer |
| UPI Lite | No | 0% | Not applicable |
These UPI transaction charges sit with merchants, not consumers. A separate 0.4% merchant discount rate also applies to specified merchant payments above Rs. 2,000 from 15 October 2026.
How many UPI transactions are free per day?
For individual users, standard person-to-person UPI transfers from a bank account are free, with no daily cap on how many free transactions you can make. NPCI only limits the volume, allowing up to 20 UPI transactions in a 24-hour window, which is an activity limit, not a charge. Person-to-merchant payments from a bank account are generally free as well. The only exception is a PPI-funded UPI payment above Rs. 2,000, which may attract an interchange fee on UPI, and that fee is paid by the merchant, not you. So for everyday users, UPI transaction charges do not apply.
Are UPI payments free or chargeable?
Unified Payments Interface (UPI) has revolutionised the way we handle transactions in India, offering a seamless and instant payment experience. One of the key attractions of UPI is its cost-effectiveness. For the most part, UPI transactions are free for users. This means that when you transfer money from one bank account to another using UPI, you typically do not incur any charges.
However, there are some exceptions. Certain banks or payment service providers may impose nominal fees for specific types of transactions, such as high-value transfers or transactions beyond a certain limit. Additionally, some third-party apps might charge a fee for premium services or instant transfers. It is always a good idea to check with your bank or payment service provider to understand any potential charges associated with UPI transactions.
UPI transaction charges for merchants
UPI charges for merchants apply only in limited cases. Under the NPCI framework, standard merchant payments carry no charge, and a fee applies only to eligible PPI-funded UPI transactions above Rs. 2,000. The table below shows when a charge applies.
| Transaction type | Applicable fee | Who bears it |
|---|---|---|
| Standard P2M UPI from a bank account | MDR 0% | Not applicable |
| PPI-funded P2M above Rs. 2,000 | Up to 1.1% interchange fee on UPI | Merchant's acquiring bank |
| UPI Lite | No charge | Not applicable |
| International UPI | Varies | Check with the payment provider |
Small merchants stay largely MDR-free, and from 15 October 2026 a 0.4% merchant discount rate applies only to specified large-merchant payments above Rs. 2,000. These UPI transaction charges are never passed on to the paying customer.
Are there any hidden costs for daily UPI transactions?
No, there are no hidden UPI transaction charges for daily use by individual users. Standard person-to-person and person-to-merchant payments from your bank account are free. A few charges exist in specific cases, but they do not fall on the everyday payer, as the table shows.
| Cost type | Applicable to | Amount | Notes |
|---|---|---|---|
| P2P bank-to-bank UPI | All users | Rs. 0 | Free under NPCI guidelines |
| PPI-funded payment above Rs. 2,000 | Merchants | Up to 1.1% interchange fee on UPI | Not charged to the paying individual |
| GST on a convenience fee | Users, if a fee applies | 18% of the fee | Only when a fee is charged |
| Third-party premium or instant transfer fee | App-specific | Varies | Check the app terms |
For everyday payments, you pay nothing extra. You can send money and pay bills free of charge using Bajaj Pay UPI, linked to your bank account.
Conclusion
UPI transaction charges do not apply to everyday users. Standard person-to-person and bank-account merchant payments are free, whatever the amount. The key points to remember:
- A charge applies only to PPI-funded merchant payments above Rs. 2,000, at up to 1.1%, borne by the merchant.
- From 15 October 2026, a 0.4% merchant discount rate applies to specified large-merchant payments above Rs. 2,000.
- Your bank account is never debited for these merchant-side fees.
Pay your bills and send money using Bajaj Pay UPI, and check any applicable charges before you confirm a transaction.
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