These days, the use of online payments has grown rapidly for everything from small to large—whether buying vegetables or paying school fees. However, with new UPI fee rules coming into effect on October 15th, users may incur additional charges for digital transactions above a certain limit.

For this reason, an increase in the number of people withdrawing cash from ATMs is expected in the coming days. Furthermore, the upcoming festive season is expected to significantly increase cash demand in the market. Keeping this in mind, banks have been instructed to keep adequate cash available in ATMs to ensure that the general public does not face any difficulties.

According to the new Merchant Discount Rate (MDR) system, certain person-to-merchant (P2M) UPI transactions exceeding ₹2,000 will attract an MDR of 0.4%. For transactions of ₹75,000 or more, the MDR limit will be ₹300. However, P2M transactions up to ₹2,000 will not attract any fee. Furthermore, person-to-person (P2P) UPI transactions will remain free. According to  the government framework, more than 95% of P2M UPI transactions by volume will not attract any charges, as they are less than ₹2,000.

The government and RBI will be monitoring the situation, keeping in mind that this change may lead some customers and merchants to return to cash transactions. Meanwhile, the country's ATM network has shrunk over the past few years.

According to RBI data, there were 251,057 ATMs in the country at the end of March 2025. A year earlier, the number was 253,417. Of these, public sector banks had 133,544 ATMs, while private banks had 77,117. The number of white-label ATMs was 36,216.

ATM cash withdrawals using debit cards also declined. Transactions fell from approximately 68,975 lakh in FY23 to approximately 53,394 lakh in FY26. During this period, the value of ATM cash withdrawals declined from ₹32.8 lakh crore to approximately ₹28.5 lakh crore.

PC: Bumppy