IRCTC UPI Update: No Extra Charges for Train Tickets from Oct 2026!
Rail passengers using UPI for high-value bookings are set to receive significant relief. Starting October 15, 2026, the cost of digital processing for train tickets will no longer be a burden on the traveler, as IRCTC and Indian Railways move to absorb upcoming transaction fees.
New UPI Payment Rules Explained
Following recent notifications from the Central Government and the National Payments Corporation of India (NPCI), new Merchant Discount Rate (MDR) regulations are being introduced for essential services. While digital payments are becoming more structured, the impact on the common man is being carefully managed.
Under the new framework, the following rules will apply to UPI transactions:
- Transactions of ₹2,000 or less: These will remain entirely exempt from all MDR charges.
- Transactions exceeding ₹2,000: For essential sectors—including railways, telecommunications, insurance, fuel, and agricultural inputs—a flat MDR of ₹5 will be applied.
- General Retail: Unlike the flat fee for railways, general retail merchants will face a 0.4% MDR on payments over ₹2,000.
- Person-to-Person (P2P): Transfers between individuals will continue to be free, regardless of the amount.
Passengers Will Pay Exactly What is on the Ticket
The most critical aspect of this update is who pays the fee. The policy explicitly dictates that passengers will not be liable for the ₹5 charge on qualifying transactions. Instead, this cost will be absorbed by the merchant, which in this context is Indian Railways and IRCTC.
To put this into perspective, if a traveler purchases a train ticket worth ₹3,000 using UPI, they will pay exactly ₹3,000. The associated processing fee will be handled internally by the railway authorities.
Union Finance Minister Nirmala Sitharaman has confirmed that this MDR is strictly a processing fee between payment operators and is not a tax, ensuring that there is no additional financial burden placed on consumers.
Banks Instructed to Protect Travelers
To prevent any accidental charges being passed down to the public, strict instructions have been issued to the banking sector. Saurabh Jain, Senior Divisional Commercial Manager for the Kota Division, reaffirmed that banks have received clear directions to ensure these processing costs are not transferred to the passengers.