India’s New UPI Fee Could Hit Forex and Crypto Traders Differently

UPI is one of the first modern payment systems that became popular in India before Bitcoin or stablecoins. For years, Indians have been turning to the system to move money online, from everyday purchases to larger financial transactions. But now, the payment channel is facing a significant change, which could affect the way traders move money into and out of forex and crypto markets.

New UPI Charges Could Change Trading Costs in India

New Merchant Discount Rate (MDR) rules will take effect on October 15, 2026, with India’s UPI payment system facing a significant change in transaction charges. It doesn’t mean that a trader should pay tax every time they make a transaction. Instead, certain UPI transactions involving large merchants, with payments exceeding ₹2,000, will face a 0.4% MDR. Finance Minister Nirmala Sitharaman stated, “MDR charges on UPI transactions above ₹2,000 are neither a Tax nor a Cess. This is an effort to mislead the Indian public.”

However, not all UPI transactions will be affected by the MDR rules. It is worth noting that Indians can continue sending money to friends and family members for free. They can also send funds less than ₹2,000 to merchants. If payments involve small vendors with less than monthly earnings of ₹1 lakh, they will not face charges.