UPI AutoPay Charges: Will MDR Apply To SIPs, Insurance Premiums And OTT Subscriptions?
Every month, money moves out of our bank accounts without us having to make a payment manually. SIPs, insurance premiums, electricity bills and OTT subscriptions are some common examples. With UPI AutoPay , these payments happen through a pre-approved mandate.
But a new question is making people curious: Will UPI charges also apply to automatic payments above ₹2,000?
The answer depends on the type of transaction. Not every UPI payment above ₹2,000 attracts the same MDR. Here's what you need to know about UPI AutoPay, SIPs and insurance premiums.
According to the information provided, MDR will apply from October 15 to certain person-to-merchant (P2M) UPI transactions above ₹2,000.
The applicable rate for eligible regular P2M payments is 0.4%. For transactions of ₹75,000 or more, the maximum MDR will be ₹300.
However, MDR is not a direct UPI transaction charge on customers. A payment above ₹2,000 does not automatically mean that the customer will have to pay an additional fee.
The payment category and applicable rules matter.
If your SIP is already running through a UPI AutoPay mandate, the MDR mentioned in the provided information will not apply to that payment.
However, there is a difference between an automatic mandate and a fresh UPI payment.
For example, if you invest in a mutual fund by making a new UPI payment every month instead of using an existing AutoPay mandate, the transaction may fall under a different category.
The stated rate is 0.02%, subject to a maximum of ₹300 per transaction.
This means that the rules for a fresh investment payment should not be confused with those for an existing UPI AutoPay mandate.
Investors should check the payment method and applicable charges before making a transaction.
The information provided mentions a separate arrangement for certain specified insurance payments above ₹2,000.
Under this arrangement, the MDR is ₹5 per transaction instead of the regular 0.4% rate.
For instance, suppose a person pays an insurance premium of ₹50,000 through an eligible payment method. A 0.4% calculation would come to ₹200, but that does not mean ₹200 will automatically be deducted as a UPI charge from the customer's account.
The applicable MDR arrangement and the way the payment is processed are important.
MDR should not be confused with an additional fee automatically charged to the customer.
A payment of ₹2,500 for an OTT subscription and a payment of ₹2,500 towards an insurance premium may not fall under the same MDR category.
Therefore, the transaction amount alone cannot determine whether MDR applies.
The payment category, merchant arrangement and applicable rules are equally important.
MDR is a fee within the merchant payment system. It is not automatically a new charge imposed directly on every customer using UPI.
Therefore, a person should not assume that every UPI payment above ₹2,000 will result in an extra charge.
However, payment providers and merchants may have their own applicable arrangements. Customers should check the final amount and any disclosed charges before completing a payment.
A monthly SIP, insurance premium, electricity bill and OTT subscription may all use UPI, but their payment categories can be different.
Before worrying about a new UPI charge, users should check:
The applicable rules depend on the nature of the payment, not just the amount.
Disclaimer: This article is for general informational purposes. MDR rules and payment arrangements may change. Check the latest applicable charges with your bank, payment provider or merchant before making a transaction.
But a new question is making people curious: Will UPI charges also apply to automatic payments above ₹2,000?
The answer depends on the type of transaction. Not every UPI payment above ₹2,000 attracts the same MDR. Here's what you need to know about UPI AutoPay, SIPs and insurance premiums.
What Is MDR On UPI Payments?
MDR stands for Merchant Discount Rate. It is a fee charged within the merchant payment system when an eligible payment is processed.According to the information provided, MDR will apply from October 15 to certain person-to-merchant (P2M) UPI transactions above ₹2,000.
The applicable rate for eligible regular P2M payments is 0.4%. For transactions of ₹75,000 or more, the maximum MDR will be ₹300.
However, MDR is not a direct UPI transaction charge on customers. A payment above ₹2,000 does not automatically mean that the customer will have to pay an additional fee.
The payment category and applicable rules matter.
Will UPI AutoPay For SIPs Attract MDR?
Many investors use UPI AutoPay to pay their monthly mutual fund SIP instalments. This allows the scheduled amount to be debited from their bank account on the selected date.If your SIP is already running through a UPI AutoPay mandate, the MDR mentioned in the provided information will not apply to that payment.
However, there is a difference between an automatic mandate and a fresh UPI payment.
For example, if you invest in a mutual fund by making a new UPI payment every month instead of using an existing AutoPay mandate, the transaction may fall under a different category.
What About Fresh Mutual Fund Payments?
Eligible capital market-related payments, including mutual funds, securities and stockbroker-related transactions, have a separate MDR arrangement in the information provided.The stated rate is 0.02%, subject to a maximum of ₹300 per transaction.
This means that the rules for a fresh investment payment should not be confused with those for an existing UPI AutoPay mandate.
Investors should check the payment method and applicable charges before making a transaction.
What Happens To Insurance Premiums Above ₹2,000?
Insurance premiums are another common payment made through UPI AutoPay. Some people pay thousands of rupees every month or year for their insurance policies.The information provided mentions a separate arrangement for certain specified insurance payments above ₹2,000.
Under this arrangement, the MDR is ₹5 per transaction instead of the regular 0.4% rate.
For instance, suppose a person pays an insurance premium of ₹50,000 through an eligible payment method. A 0.4% calculation would come to ₹200, but that does not mean ₹200 will automatically be deducted as a UPI charge from the customer's account.
The applicable MDR arrangement and the way the payment is processed are important.
MDR should not be confused with an additional fee automatically charged to the customer.
Will OTT Subscriptions And Electricity Bills Become Costlier?
UPI AutoPay is also used for recurring payments such as:- OTT subscriptions
- Mobile bills
- Electricity bills
- Loan EMIs
- Other recurring services
A payment of ₹2,500 for an OTT subscription and a payment of ₹2,500 towards an insurance premium may not fall under the same MDR category.
Therefore, the transaction amount alone cannot determine whether MDR applies.
The payment category, merchant arrangement and applicable rules are equally important.
Does The Customer Have To Pay MDR Separately?
One of the biggest concerns about MDR is whether customers will see an additional deduction from their bank accounts.MDR is a fee within the merchant payment system. It is not automatically a new charge imposed directly on every customer using UPI.
Therefore, a person should not assume that every UPI payment above ₹2,000 will result in an extra charge.
However, payment providers and merchants may have their own applicable arrangements. Customers should check the final amount and any disclosed charges before completing a payment.
What Should UPI AutoPay Users Remember?
The key point is that UPI AutoPay payments cannot be judged only by their amount.A monthly SIP, insurance premium, electricity bill and OTT subscription may all use UPI, but their payment categories can be different.
Before worrying about a new UPI charge, users should check:
- Whether the payment is made through an existing UPI AutoPay mandate.
- Whether it is a fresh UPI payment.
- Which category the transaction belongs to.
- Whether any applicable charges are disclosed by the payment provider.
The applicable rules depend on the nature of the payment, not just the amount.
Disclaimer: This article is for general informational purposes. MDR rules and payment arrangements may change. Check the latest applicable charges with your bank, payment provider or merchant before making a transaction.
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