Apple Pay card payments will not attract UPI's 0.4% MDR from October 15

Apple Pay has been launched in India, and the government has imposed merchant discount rate (MDR) charges on UPI from October 15. The question now is whether the same MDR will apply to payments made through Apple Pay.

Traders have shown resentment over the UPI charges. They will protest on October 2 under the banner "NO UPI". Many believe the charges will not stop at UPI and will extend to Apple Pay as well.

For now, Apple Pay in India supports Axis Bank Visa and Mastercard credit cards. This means payments can be made easily from an iPhone, an Apple Watch and other Apple devices.

Under the new UPI rules effective October 15, 2026, select person-to-merchant UPI payments above Rs 2,000 will attract a 0.4% MDR. For transactions of Rs 75,000 or more, the MDR will be capped at Rs 300. A flat MDR of Rs 5 has been fixed for certain essential sectors such as fuel, telecom, insurance and railways.

Apple Pay is different. It runs on credit or debit card tokenisation, not on UPI. So no card payment made through Apple Pay will attract the 0.4% MDR.

There is an important difference between Apple Pay and UPI. Apple Pay has started in India with Visa and Mastercard credit cards, so payments are processed through the card networks and not through UPI. Credit card payments also carry a merchant fee similar to MDR. This is generally part of the arrangement between the merchant and the payment provider. Merchants accepting card payments through Apple Pay may therefore incur payment processing costs.

Will Apple Pay also get UPI? Apple Pay has started in India with Visa and Mastercard credit cards, and UPI support was not offered at the start. Earlier reports had also said that Apple Pay would initially come through card networks and would not support UPI.

In short, if you pay by card through Apple Pay, you will not have to pay MDR the way you do on UPI.