Why AutoPay and SIP payments carry no UPI MDR

The short answer

Is there MDR on UPI AutoPay and SIPs?

No. UPI AutoPay and recurring mandates - utility bills, OTT subscriptions, SIPs and other recurring investments - carry no prescribed MDR (FAQ Q22).

The exemption holds whatever the amount.

In this article

1. What the rule says
2. Which payments count as mandates
3. The amount makes no difference
4. SIPs versus one-off investments
5. What it means for the customer
6. How to check your settlement
7. Who benefits most
8. Three common mix-ups
9. A short checklist

A lot of UPI money now moves without anyone scanning anything. Electricity bills, phone recharges, streaming subscriptions, insurance premiums and monthly SIPs are paid automatically, through standing instructions that the customer approves once. For the businesses that collect these payments - utilities, telecom companies, subscription services, mutual funds - one question matters a great deal: does the new UPI MDR apply?

The FAQ answers it clearly, and this article explains the answer, what counts as a mandate, where the edges are, and how to make sure your settlement report reflects it. Every rule carries its FAQ question number so you can check it in the official document.

What the rule says

The FAQ says automated recurring standing instructions - known as UPI Mandates or AutoPay - do not carry prescribed MDR charges. Payments set up as automated recurring transfers for monthly utility bills, OTT streaming subscriptions and all recurring investments will not pay any prescribed MDR charge FAQ question FAQ Q22.

Three things are worth noticing in that sentence:

• It is about how the payment is made, not who is paid. The same company can receive both AutoPay payments, which carry no MDR, and ordinary one-off UPI payments, which follow the usual rules.
• "All recurring investments." SIPs into mutual funds are the obvious case, but the FAQ does not limit it to them.
• No amount is mentioned. There is no ₹2,000 threshold or ₹300 cap in the AutoPay rule, because there is no charge to limit.

Which payments count as mandates

A UPI mandate - often shown in apps as AutoPay - is a standing instruction the customer sets up once, approving a merchant to collect a recurring amount. The FAQ's own examples are FAQ question FAQ Q22:

• monthly utility bills;
• OTT streaming subscriptions;
• recurring investments, such as SIPs.

What makes a payment a mandate payment is that it is collected under that standing instruction. A customer who opens their app and pays this month's electricity bill by hand is making an ordinary UPI payment, even if they do it every month.

The amount makes no difference

Because the exemption is about the type of payment, it holds at any amount FAQ question FAQ Q22.

SIPs versus one-off investments

This is the distinction that most often trips people up. A recurring SIP collected by mandate carries no MDR FAQ question FAQ Q22. But a one-off UPI payment to an investment business is different: payments to mutual funds, stockbrokers, securities dealers and investment platforms have their own rate of 0.02% of the amount, capped at ₹300 FAQ question FAQ Q37, Q38.

So for an asset management company, three kinds of UPI inflow can sit side by side:

• a monthly SIP instalment by AutoPay - no prescribed MDR FAQ question FAQ Q22;
• a one-off lump-sum purchase by UPI - 0.02%, capped at ₹300 FAQ question FAQ Q37;
• a broker wallet top-up by UPI - also covered by the capital-market rate FAQ question FAQ Q38.

Our calculator is built for shops and service businesses and does not model the 0.02% capital-market rate. If you run an investment business, confirm your figures with your PSP.

What it means for the customer

Nothing changes for the person paying. UPI stays free for consumers FAQ question FAQ Q15, there is no monthly limit on free payments FAQ question FAQ Q20, and apps cannot add a platform fee FAQ question FAQ Q17. A customer's SIP of ₹5,000 still takes exactly ₹5,000 from their account.

And a merchant cannot pass MDR on to customers in any case FAQ question FAQ Q34 - see Can a shopkeeper charge the 0.4% to customers? What the rules actually say.

How to check your settlement

From 15 October 2026 FAQ question FAQ Q5, any fee on a mandate collection is a sign something is wrong. To check:

1. Download your settlement or transaction report as a CSV from your PSP dashboard or net banking.
2. Look for the column that shows the payment type - often called "type", "channel" or "mode" - and filter for AutoPay, mandate, recurring or standing-instruction rows.
3. The fee on each of those rows should be zero.

Our settlement check does this automatically. When you map the transaction-type column, it treats rows marked AutoPay, mandate, e-mandate, recurring, subscription or standing instruction as mandate collections, expects no fee on them, and flags any row where one was deducted. The file never leaves your phone. How to read the report by hand is covered in How to read your UPI settlement statement and spot a wrong deduction.

Who benefits most

Businesses whose collections are mostly recurring:

• Utilities - electricity, water and piped-gas bills, which already pay only a flat ₹5 above ₹2,000 when paid by hand FAQ question FAQ Q41, and nothing through AutoPay.
• Telecom - postpaid bills and recharges set up as mandates; one-off payments above ₹2,000 pay the flat ₹5 FAQ question FAQ Q33.
• Insurance - premiums on AutoPay carry no MDR; one-off premiums above ₹2,000 pay the flat ₹5 FAQ question FAQ Q39.
• Subscriptions and SIPs - named directly in the rule FAQ question FAQ Q22.

For these businesses, encouraging customers onto AutoPay is not only convenient; it removes MDR on those payments entirely.

For small merchants the question rarely arises, and if you are P2PM - UPI money over QR straight into a personal account, up to ₹1 lakh a month - you pay no MDR on anything FAQ question FAQ Q23, Q24. See P2PM explained: the ₹1 lakh monthly exemption for small merchants.

Three common mix-ups

"My customer pays every month, so it counts as recurring." Only if it is collected under a mandate. A customer who pays by hand each month is making ordinary UPI payments, which follow the usual rules FAQ question FAQ Q22, Q26.

"Utility bills are always free of MDR." Only through AutoPay. Paid by hand, a utility bill above ₹2,000 costs the utility a flat ₹5 FAQ question FAQ Q41.

"AutoPay means the customer pays a fee." No. Consumers pay nothing for UPI, including mandates, and apps cannot charge a platform fee FAQ question FAQ Q15, Q17.

A short checklist

1. Find out which of your collections come through mandates and which are one-off.
2. For one-off payments, work out your cost with the MDR calculator, or the monthly cost estimator for a whole month.
3. From 15 October, check that no mandate row carries a fee.
4. If one does, keep the report and raise it with your PSP.

For the flat ₹5 sectors in detail, see Flat ₹5 sectors: fuel, telecom, insurance, railways, utilities - and what is still unconfirmed. The whole picture of the new rules is in UPI charges from 15 October 2026: the complete guide for merchants.

Common questions

Is there MDR on a SIP paid through UPI AutoPay?

No. Recurring investments collected through UPI mandates carry no prescribed MDR (FAQ Q22).

Is there MDR on a one-off UPI payment to a mutual fund?

Yes, at a lower rate: payments to mutual funds, brokers and investment platforms carry 0.02% of the amount, capped at ₹300 (FAQ Q37, Q38).

Does the AutoPay exemption have an upper limit?

No. The rule mentions no amount; a mandate collection carries no prescribed MDR whatever its size (FAQ Q22).

Is my electricity bill charged if I pay it by scanning a QR?

You pay nothing. The electricity company pays a flat ₹5 if the bill is above ₹2,000 (FAQ Q41), and nothing if the bill comes through AutoPay (FAQ Q22).