An online screenshot showing a tool that claims to split UPI payments into instalments of up to Rs 1,999 has triggered debate on social media amid new merchant discount rate (MDR) rules coming into effect from October 15, 2026.
The idea was shared on LinkedIn by chartered accountant Akhil Agarwal, who described it as “UPI, but with a little jugaad” and questioned whether splitting a payment into smaller amounts could help avoid applicable charges.
However, the authenticity of the tool has not been independently verified. The screenshot alone also does not establish whether the tool actually works or can legitimately avoid MDR.
How Does The UPI Tool Claim To Work?
According to the screenshot, the tool asks users to enter a UPI ID, account holder’s name and payment amount. It then generates separate QR codes for payments of up to Rs 1,999 each.
For example, a payment of Rs 4,500 is shown divided across three QR codes.
The page claims: “Collect the full amount. Pay Rs 0 fees.” It also says payment details never leave the browser.
However, these claims cannot be independently established from the screenshot. It is also unclear whether the tool is an operational application or merely a concept.
Social Media Users Raise Fraud Concerns
The proposed system prompted several practical questions online, particularly around larger payments.
One commenter questioned whether a payment of Rs 2 lakh would require the sender to enter a UPI PIN nearly 100 times.
Another warned that repeated transactions could potentially attract scrutiny, saying the activity “can be easily flagged for fraud.”
These were concerns raised by social media users and should not be treated as findings that the tool itself is fraudulent or that its use would automatically trigger a bank investigation.
The discussion also touched on whether personal UPI transfers should remain free and who should ultimately bear the cost of India’s digital payments infrastructure.
What Are The New UPI MDR Rules?
The discussion comes ahead of a new framework taking effect on October 15, 2026.
According to the Finance Ministry information cited in the report, personal UPI transfers will remain free, irrespective of the amount. Customers making merchant payments will also not directly pay the MDR.
Under the new framework, specified merchant payments above Rs 2,000 will attract an MDR of 0.4%, capped at Rs 300. Payments up to Rs 2,000 and eligible small-merchant transactions will remain exempt.
Certain essential sectors will instead face a flat Rs 5 charge on payments above Rs 2,000.
The ministry has said that around 96% of merchant transactions will remain unaffected.
Does Splitting A Payment Avoid MDR?
The screenshot does not establish that splitting a larger merchant payment into multiple transactions below Rs 2,000 would legally or technically eliminate applicable charges.
The tool’s claimed functionality therefore should not be interpreted as a confirmed method to bypass the new MDR framework.
For now, the online discussion centres on whether such a system would be practical and how banks, payment companies and regulators might view repeated transaction patterns.
The distinction is important: the new MDR is a merchant-side charge, not a new fee imposed directly on ordinary UPI users.
