India’s New UPI Fee Raises Funding Questions for Forex and Crypto Platforms

Summary

• India’s UPI merchant fee applies to eligible payments above ₹2,000, while personal transfers and most merchant transactions remain entirely exempt.
• India’s Financial Intelligence Unit issued notices to 15 crypto platforms and requested the removal of their applications and websites from public access.
• Brokers and exchanges must clarify deposit classifications and payment options before traders can assess any practical changes to funding costs.

India’s new UPI merchant fee could affect how forex brokers and crypto exchanges accept rupee deposits, depending on payment classification and each platform’s response.

How the UPI Fee Applies to Trading Deposits

From October 15, 2026, a 0.4% merchant discount rate will apply to qualifying UPI merchant payments above ₹2,000. The fee will have a ₹300 cap on transactions worth ₹75,000 or more. According to India’s finance ministry, MDR is a merchant payment charge, not a tax on trading.

According to a post shared by IndianGems on X, the change has raised concerns about forex and crypto trading costs. However, buying Bitcoin or opening a forex position does not itself trigger the new UPI fee. The question is whether a trader’s rupee deposit qualifies as a chargeable merchant payment.

Most UPI payments will remain free of MDR. Person-to-person transfers are exempt regardless of value, as are merchant payments of ₹2,000 or less. Qualifying small merchants receiving up to ₹1 lakh monthly through UPI QR payments also remain exempt. The finance ministry estimates that the framework will leave about 96% of merchant transactions unaffected.

For trading platforms, deposit classification matters because the framework does not assign every merchant payment the same rate. Payments relating to mutual funds, securities, stockbrokers and dealers carry a separate 0.02% MDR, capped at ₹300. The published guidance does not explicitly identify forex brokers or crypto exchanges within that category. Consequently, the headline 0.4% rate alone cannot establish the cost of every trading deposit.

Crypto Platforms Also Face Access Requirements

Payment costs are only one factor affecting how Indian customers reach crypto markets. As 36Crypto reported, India’s Financial Intelligence Unit issued non-compliance notices to 15 crypto platforms in September and requested the removal of their applications and websites from public access.

According to the government announcement, the notices concern obligations under the Prevention of Money Laundering Act. Crypto providers serving Indian customers must register with the FIU and meet reporting and record-keeping requirements. Those obligations apply to domestic and offshore providers alike.

The FIU action does not stem from the UPI fee. Together, however, the developments show why access to a crypto platform and its deposit options require separate checks. A platform’s compliance status affects access, while its payment arrangements determine how customers can move rupees into an account.

Platforms Must Clarify Their Payment Arrangements

India’s finance ministry states that customers should not pay MDR as a direct UPI charge. It has advised banks to prevent merchants from passing that charge to customers through payment fees. UPI applications also cannot impose hidden platform fees under the framework.

Brokers and exchanges may still review their arrangements with payment providers if eligible deposits create costs. Their notices should clarify which deposit methods remain available and whether funding procedures will change. Until platforms publish those details, higher trading fees, slower transfers and reduced liquidity remain possibilities rather than established effects.

The confirmed UPI change applies to specified merchant payments, while the FIU notices address separate compliance failures. Neither measure imposes a new charge on each forex or crypto trade.

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