UPI Train Ticket Rule: Rs 5 MDR Charge From October 15, Here's What Passengers Need to Know

A new UPI payment rule is set to affect train ticket transactions from October 15, 2026. The National Payments Corporation of India (NPCI) has introduced a special Merchant Discount Rate (MDR) of Rs 5 for certain UPI transactions above Rs 2,000, including payments made to railway merchants.

The change is particularly relevant for passengers who book train tickets online through IRCTC

and choose UPI as their payment method. However, passengers will not have to pay the additional Rs 5 separately. The MDR will be borne by the railway merchant, such as Indian Railways or IRCTC.

How the Rs 5 UPI Charge Will Work

MDR is a fee associated with processing digital payments. According to NPCI’s guidelines, merchants using UPI cannot pass this cost on to customers.

For selected merchant categories, including railways, telecom services, insurance and fuel, a flat Rs 5 MDR

will apply to UPI transactions exceeding Rs 2,000.

For example, if a train ticket costs Rs 3,000 and the passenger pays through UPI, the customer will continue to pay Rs 3,000. The railway merchant will bear the additional Rs 5 MDR.

Likewise, if a ticket costs Rs 10,000, the applicable MDR for the railway transaction will remain Rs 5 rather than increasing with the ticket value.

What Happens to UPI Payments Below Rs 2,000?

UPI transactions below Rs 2,000 will not attract this MDR charge under the revised framework.

For regular Person-to-Merchant (P2M) transactions above Rs 2,000, the standard MDR is 0.4%

, subject to the applicable rules and caps. Transactions above Rs 75,000 have an MDR cap of Rs 300.

Railway transactions and certain other specified sectors, however, will receive the special flat-rate treatment of Rs 5.

NPCI Says Customers Cannot Be Charged MDR

NPCI has clarified that merchants are not permitted to recover MDR from customers by adding the charge to the transaction amount.

The MDR revenue will remain within the UPI ecosystem and will support areas such as payment infrastructure, innovation, cybersecurity and customer service

.

The revised MDR framework, including the special Rs 5 rate for eligible railway transactions above Rs 2,000, will come into effect from October 15, 2026.