Are Netflix and SIP AutoPay Getting Costlier Under New October 15 UPI MDR Rules?
Starting October 15, NPCI introduces a tiered P2M MDR (0.4 per cent general >INR 2,000, capped at INR 300; INR 5 flat for insurance >INR 2,000; 0.02 per cent% for capital markets). P2P transfers and P2M less than INR 2,000 remain free, and UPI AutoPay recurring bills/SIPs are exempted. Scroll below to know more.
Starting October 15, the National Payments Corporation of India (NPCI) and the government framework introduce a merchant discount rate (MDR) on select high-value person-to-merchant (P2M) UPI transactions above INR 2,000, while ring-fencing recurring mandates and everyday transfers.
Key Framework Rules and Thresholds
- Standard P2M Rate: Regular eligible merchant transactions above INR 2,000 carry a 0.4 per cent MDR, capped at INR 300 for transactions of INR 75,000 and above.
- Exemptions: Person-to-person (P2P) transfers remain completely free regardless of size, and small P2M transactions up to INR 2,000 (accounting for over 95 per cent of volume) are untouched.
- Ecosystem Structure: MDR is a fee paid by merchants to banks and payment processors (such as PhonePe or Google Pay), not a direct surcharge levied on customers at checkout, though final consumer impact depends on merchant pricing policy. Will Sending Money to Friends or Paying at Shops Cost Extra Under the New UPI Rules?
What Happens to Insurance and Capital Markets?
- Insurance Payments: Specified insurance payments above INR 2,000 attract a flat INR 5 MDR per transaction rather than a percentage calculation, preventing large percentage cuts on high-value annual policies.
- Mutual Funds & Securities: One-time capital-market payments (mutual funds, securities, stockbrokers, wallet top-ups) attract a concessional 0.02 per cent MDR, capped at INR 300.
Will Netflix, Phone Bills, and SIP AutoPay Get Costlier?
- UPI AutoPay Protection: Recurring payments processed via UPI Mandates/AutoPay - including streaming services like Netflix, utility/electricity bills, mobile recharges, insurance auto-debits, and mutual fund SIPs - do not attract the prescribed MDR.
- Mechanism Matters: An automated monthly SIP via UPI AutoPay remains exempt, whereas a fresh, one-time manual payment for mutual fund units falls under the capital-market 0.02 per cent structure. Subscription auto-pays for OTT and phone bills via mandates continue without additional NPCI-mandated structural charges. UPI Payments New Rule FAQs: Who Pays, How Much and Which Transactions Are Exempt?
Broader Outlook and Compliance Context
While merchants absorb these tiered processing charges, industry analysts note that the framework formalises revenue streams for banks and third-party app providers without disrupting free peer-to-peer adoption or micro-retail payments. Consumers should verify that recurring mandates are properly registered via UPI AutoPay to retain exemption status, as one-time manual checkout behaviour differs structurally from automated recurring arrangements.
(The above story first appeared on LatestLY on Sep 17, 2026 04:33 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).