New UPI MDR From October 15, Know- Will Indians Pay Extra While Using UPI In 11 Foreign Countries?

Mumbai: India’s new Unified Payments Interface (UPI) Merchant Discount Rate (MDR), scheduled to take effect from October 15, 2026, could extend beyond the country’s borders. According to Finance Ministry sources, the revised MDR framework will also apply in 11 countries where UPI payment services are currently available.

UPI MDR Sparks Merchant Protest

The new MDR structure has triggered opposition from traders and business organisations across India. Merchants have announced a “No UPI Day” on October 2 to protest against the levy.

Participating shopkeepers plan to stop accepting UPI payments for the day. Some traders may also remove UPI payment boards from their shops or cover them with black cloth as a symbolic protest.

Will MDR Apply Outside India?

According to Finance Ministry sources, the MDR framework will also be extended to overseas markets where UPI services are operational.

The 11 countries cited are the United Arab Emirates (UAE), France, Singapore, Bhutan, Nepal, Sri Lanka, Mauritius, Qatar, Cambodia, Greece and the Maldives.

This means the revised UPI merchant-payment framework being introduced in India could have an international footprint as well.

Will Travellers Have To Pay?

Indian tourists, students and other consumers travelling overseas will continue to make payments through UPI without paying the MDR charge.

The levy will instead apply to foreign merchants accepting UPI payments and acquiring partners operating internationally. Therefore, consumers are not expected to pay an additional 0.4 per cent charge simply for using UPI abroad.

Why Is MDR Being Introduced?

Finance Ministry sources said the revised MDR structure is intended to create a more sustainable financial model for the UPI ecosystem, which has largely operated under a zero-MDR framework for merchant transactions.

They added that MDR alone does not cover the entire cost of maintaining the UPI ecosystem.

The rates were reportedly determined by the Indian Banks’ Association (IBA) after discussions with stakeholders. The government currently has no plan to postpone the October 15 implementation deadline.

The development indicates that the new framework could reshape how UPI merchant payments are processed both domestically and across its expanding international network.