The New UPI Charges from October 2026: What It Actually Means for Restaurants
From 15 October 2026 a 0.4% MDR applies to UPI payments to merchants above ₹2,000. What it means for a restaurant’s pricing, reconciliation and books — and who is actually exempt.
UPI has been free for both sides of a payment since it launched — no fee to the customer, none to the merchant — which is a large part of why it became the default way India pays. That changes, partially, from 15 October 2026. Here is what is actually changing, who it affects, and what to do about it. Rules like this are refined after announcement, so confirm the current detail with your bank or payment provider closer to the date and don't treat this as final legal or tax advice.
What's actually changing
From 15 October 2026, a Merchant Discount Rate (MDR) of 0.4% applies to UPI person-to-merchant payments above ₹2,000, capped at ₹300 for payments of ₹75,000 or more. Payments of ₹2,000 or under stay free, exactly as today. The charge is payable by the merchant — not the customer — and merchants are not permitted to pass it on to customers as a surcharge or a separate "platform fee" line.
Who is exempt
Small merchants with monthly UPI QR receipts under ₹1 lakh are exempt and continue to pay nothing. A neighbourhood restaurant doing modest UPI volume may fall under this threshold entirely; a busier restaurant, especially one doing family-size bills or banquet/catering payments, is more likely to cross it. Check where your own restaurant's monthly UPI volume actually sits before assuming either way.
What this actually costs a restaurant
For context: a ₹2,500 family bill paid by UPI carries a 0.4% charge — ₹10. A ₹1,800 bill stays free, since it's under the ₹2,000 threshold. The charge only bites on the larger bills — a big table, a banquet, a bulk takeaway order — not the average quick-service transaction most QSR restaurants run. Restaurants that skew toward smaller average tickets are likely to see very little real cost from this; a restaurant with a high average bill, or one that does catering-sized UPI payments, will feel it more.
What actually needs to change in how you run things
Nothing needs to change in how a guest pays — they still just scan and pay, exactly as before. What does need attention is your own reconciliation: the amount that settles to your bank account will now be very slightly less than the bill total, on the bills where the MDR applies, the same way a card payment gateway fee already nets out before it lands in your account. If your bookkeeping only ever checks "did the full bill amount arrive," a small, real gap will start showing up on larger UPI bills that isn't fraud or a mistake — it's the fee.
Where EasyBills fits
EasyBills already tracks a fee rate per payment method for exactly this reason — card and gateway fees already net out this way in reconciliation — so accounting for a UPI MDR on the bills it applies to is the same mechanism, not a new one: the bank-matching report shows the fee-adjusted amount you should actually expect to see land, rather than the full bill total, so a real settlement doesn't look like a shortfall.