UPI MDR: Traveling abroad for a few days? Will you still have to pay charges? The government clarifies.

MDR (Merchant Discount Rate) will apply to certain large UPI payments starting October 15. Find out how this affects Indians traveling abroad and the general public, and which payments will remain fee-free.

Are you planning to travel abroad for a few days? You will likely need to make UPI payments there as well. Naturally, you might be wondering if the new rules mean you will have to pay a separate fee for every transaction. The government has answered this question.

According to the government, the MDR fee will not be charged directly to the customer. In other words, ordinary people making UPI payments will not be subject to this new fee. Merchants are also prohibited from recovering this fee from customers.

What changes on October 15?

MDR will apply to certain large UPI payments starting October 15, 2026. Under the new rules, a charge of 0.4% has been set for eligible merchant payments exceeding ₹2,000.

A maximum fee cap of ₹300 has been set for such payments amounting to ₹75,000 or more. However, it is important to note that this fee is not charged to the customer.

What about those traveling abroad?

If you are traveling abroad for a few days and make a UPI payment at a shop there, you will not be charged an MDR fee simply because you are overseas.

However, UPI is not accepted everywhere abroad. Therefore, before traveling, make sure to check whether UPI payment facilities are available at your destination.

What else is exempt from charges?

If you send money via UPI to family or friends in India—whether before leaving or while abroad—no MDR will apply to these transactions either.

This means that person-to-person (P2P) money transfers will continue to be free of charge, just as before.