Passengers booking train tickets through Unified Payments Interface (UPI) will notice changes in backend payment frameworks starting October 15, 2026. Recent announcements regarding a 0.4% Merchant Discount Rate (MDR) on UPI payments above ₹2,000 have caused confusion among daily commuters regarding potential added ticket costs.
Indian Railways officials have clarified how these new payment rules affect passenger bookings.
Key Highlights of the New UPI Rule
- Special Ticketing Category: While regular merchant UPI transactions over ₹2,000 will attract a 0.4% fee, Indian Railways ticket bookings have been placed under a special discounted slab.
- Flat ₹5 Merchant Fee: For train ticket bookings exceeding ₹2,000 made via UPI, a flat processing fee of ₹5 will apply on the merchant side instead of the standard 0.4% charge.
- Zero Additional Cost for Passengers: Senior Divisional Commercial officials confirmed that the ₹5 MDR is a payment-processing cost borne by the merchant (IRCTC/Banks) and will not be passed on to the passenger.
- No Fee Under ₹2,000: UPI ticket payments up to ₹2,000 remain completely free of MDR charges.
How It Works: Passenger Fare Example
If you book a train ticket costing ₹3,000 using Google Pay, PhonePe, or Paytm:
| Payment Parameter | Standard Merchant | IRCTC Ticket Booking |
| Applicable MDR Rate | 0.4% (₹12) | Flat ₹5 (Merchant Side) |
| Final Amount Paid by Passenger | ₹3,000 | ₹3,000 (No extra charge) |
The Union Finance Ministry advised banks to ensure payment service providers do not pass these backend processing costs to travelers purchasing ticket reservations.
How to Book Tickets Smoothly on IRCTC via UPI
- Log into the official IRCTC Rail Connect App or website.
- Select your journey route, date, and preferred train class.
- Enter passenger details and proceed to the Payment Gateway section.
- Select BHIM / UPI as your payment option.
- Enter your Virtual Payment Address (VPA) or scan the QR code using your preferred UPI app.
- Approve the transaction within 5 minutes to confirm your berth instantly.
Editorial Note
For real-time train status updates, Tatkal guidelines, and special train announcements, bookmark IRCTC NEWS or follow our updates.