UPI new rules from Oct 15: What happens to insurance, SIP payments? Will Netflix, phone bills via AutoPay get costlier?

New UPI rules effective October 15 introduce a 0.4% fee for merchant transactions above ₹2,000. While some costs may rise for consumers, person-to-person transfers remain free. Subscriptions via UPI AutoPay won’t incur additional charges, protecting users from unexpected increases.

The new UPI rules will change how certain high-value merchant transactions are handled from 15 October, bringing insurance and capital-market payments under the merchant discount rate (MDR) framework. Will that mean your insurance, SIP, and OTT subscriptions will increase?

For consumers like you and me, the impact will depend on what we pay for and how we make these payments. For example:

But does not mean that consumers will have to pay these charges directly. MDR is generally a fee paid by the merchant to banks and payment service providers. Whether your bill will increase depends on whether a business passes the costs on to customers.

As per the new rules, OTT subscriptions – Netflix, Amazon, Jiohotstar – and utility bills paid automatically through UPI AutoPay will be treated differently from one-time UPI payments. Such payments will be considered as recurring payments, and there will be no charges on these payments

That means no extra charges will be levied for UPI AutoPay for services such as OTT subscriptions, mobile bills, electricity bills, insurance and mutual funds

Ending nearly six years of a fully free Unified Payments Interface (UPI) network for merchants, the government on Tuesday introduced a 0.4 per cent transaction fee on payment above ₹2,000, capped at ₹300 for payments of ₹75,000 and above, from October 15, while explicitly ring-fencing everyday person-to-person transfers from any charge.

The carefully calibrated move signals the end of an era for the world's largest real-time payments system even as the government tries to avoid alarming the hundreds of millions of users who use it daily.

Person-to-person (P2P) transfers - which make up 37 per cent of UPI's transaction volume and 70 per cent of its transaction value - will continue to attract zero charges, irrespective of size. Small-value transactions up to ₹2,000, which the government said account for more than 95 per cent of total P2M volume, remain untouched.

"Charges will apply only to person-to-merchant (P2M) transactions exceeding ₹2,000," the finance ministry said in a statement. "A nominal merchant discount rate (MDR) of 0.4 per cent will be levied on P2M transactions above ₹2,000. This commission will be shared amongst the payment ecosystem partners including banks and app providers."

Essential and thin-margin sectors - railways, telecom, insurance, fuel and agricultural inputs - will pay a flat MDR of ₹5 per transaction above ₹2,000, intended to keep costs predictable for critical services; these categories account for nearly 17 per cent of P2M transaction volume but roughly 46 per cent of P2M transaction value.

In August, UPI processed a total of 24.5 billion transactions worth 29,823 billion rupees for more than 550 million users, official data show.

UPI has a share of 84% in India's digital payments by volume and a 49% share of global real-time payment volumes, the government said on Tuesday.

Walmart's PhonePe and Alphabet's GooglePay had about 80% market share by value of UPI transactions in August.

Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.