UPI AutoPay payments for SIPs, insurance premiums, utility bills and OTT subscriptions will not attract the newly prescribed MDR simply because the recurring payment is above ₹2,000.
The revised UPI MDR framework will come into effect from October 15, 2026, but recurring mandates are treated separately under the new rules.
UPI AutoPay Rules for Recurring Payments
UPI AutoPay allows users to authorise recurring payments from their linked bank account.
Once a mandate is set up, the specified amount is automatically deducted on the scheduled date without requiring the user to make the payment manually each time.
The facility is used for payments such as mutual fund SIPs, insurance premiums, electricity bills, mobile bills, EMIs and OTT subscriptions. NPCI also lists these recurring payments among the uses of UPI AutoPay.
Under the new framework, UPI AutoPay and other recurring UPI mandates will not attract the prescribed MDR.
This means an existing SIP or OTT subscription paid through AutoPay will not become more expensive because of the new 0.4% MDR.
What Changes From October 15
From October 15, 2026, a 0.4% Merchant Discount Rate will apply to specified person-to-merchant UPI payments above ₹2,000. The MDR will be capped at ₹300 for transactions of ₹75,000 or more.
However, this MDR is part of the merchant payment ecosystem and is not a direct transaction fee for ordinary UPI users.
The Finance Ministry has also clarified that person-to-person UPI payments will remain free, while payments to merchants up to ₹2,000 will continue to have zero MDR.
The payment method and transaction category therefore matter. A payment made through a recurring UPI mandate is treated differently from a fresh one-time merchant payment.
What Happens to SIP Payments
A mutual fund SIP set up through UPI AutoPay will continue to be deducted according to the existing mandate. The new prescribed MDR will not be applied to the recurring AutoPay transaction.
There is a separate rate for eligible one-time capital-market payments. Such transactions, including certain payments involving mutual funds and securities, will attract an MDR of 0.02%, subject to a maximum of ₹300 per transaction.
Therefore, investors should distinguish between a recurring SIP collected through UPI AutoPay and a fresh one-time UPI payment for an investment.
What Happens to OTT and Bill Payments
OTT subscriptions such as Netflix and other streaming services paid through UPI AutoPay will not attract the new 0.4% MDR simply because the recurring amount crosses ₹2,000.
The same treatment applies to recurring payments made through UPI mandates for services such as utility bills and insurance.
For users, the key point is that the new UPI MDR framework does not mean every payment above ₹2,000 will become more expensive. The charge depends on the type of transaction and how the payment is processed.
