Unified Payments Interface (UPI) recorded 24.07 billion transactions worth Rs 29.37 lakh crore in September, marking a 1.8% decline in volume and a 1.5% drop in value compared to August, according to data from the National Payments Corporation of India (NPCI). Year-on-year, transaction volumes rose 22.5% and values increased 17.8%.
The September data showed 8.83 billion Person-to-Person (P2P) transactions and 15.22 billion Person-to-Merchant (P2M) transactions. Only 4% of P2M transactions were valued above Rs 2,000, amounting to roughly 609 million transactions. However, these higher-value transactions accounted for 67% of the total P2M transaction value, or Rs 5.94 lakh crore, medianama.com reported.
In August, Parliament passed the Taxation and Other Laws (Amendment) Bill, 2026, which amended Section 10A of the Payment and Settlement Systems Act, 2007. This amendment allows the government to impose a Merchant Discount Rate (MDR) on certain electronic payment modes, including UPI. Starting October 15, a 0.4% MDR will apply to UPI P2M transactions above Rs 2,000, potentially generating significant revenue given the high value of these transactions.
If the 0.4% MDR is applied to the Rs 5.94 lakh crore worth of UPI P2M transactions above Rs 2,000 recorded in September, it would amount to substantial charges collected from merchants. This new fee structure is set to take effect from October 15, as per the NPCI data and recent legislative changes.