UPI is getting its first merchant charges in nearly six years — but most of your payments will stay free. Here is what changes from October 15.

The Supreme Court on Monday issued notices to the RBI and NPCI on a plea challenging the new Merchant Discount Rate framework, but declined to stay it. The framework imposes a 0.4 per cent MDR on specified UPI person-to-merchant transactions above Rs 2,000.

What stays free: all person-to-person transfers, regardless of size, and merchant payments below Rs 2,000. About 96 per cent of standard retail transactions are unaffected. The charge is capped at Rs 300 for payments of Rs 75,000 and above.

Some sectors get concessional rates. Railways, telecom, insurance, fuel and agricultural inputs pay a flat Rs 5 per transaction above Rs 2,000; mutual funds and securities pay 0.02 per cent.

Solicitor General Tushar Mehta told the court no MDR money goes to the government — it is a service charge for banks and aggregators, who have been told not to pass it to customers. Respondents must reply within four weeks.