Here comes an app to split UPI payments into ₹1,999 instalments: Social media reacts, ‘Can be easily flagged for fraud’

Effective October 15, 2026, merchant payments over ₹2,000 will incur a 0.4% charge. The app apparently tries to solve that ‘problem’.

Here comes an app claiming to split UPI payments into ₹1,999 instalments. The idea has sparked considerable debate on LinkedIn. Shared by CA Akhil Agarwal, the screenshot drew amusement, several practical questions and warnings from commenters.

Agarwal described the idea as “UPI, but with a little jugaad”. He asked whether splitting payments into smaller amounts could help avoid charges.

LiveMint could not independently verify the app's authenticity.

Quick answers to key questions

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QUESTIONS

The app claims to split UPI payments into ₹1,999 instalments by providing separate QR codes for each instalment while asking for the UPI ID and account holder's name.

Commenters are worried that splitting large payments into many smaller transactions could trigger bank scrutiny for suspicious activity, potentially resembling fraudulent behavior.

From October 15, 2026, merchant payments above ₹2,000 will attract a 0.4% MDR, capped at ₹300, while transactions below this amount will remain free for personal transfers.

Users should not worry about charges, as personal UPI transfers remain free; however, merchants will incur fees on transactions above ₹2,000.

The new MDR rules are expected to create a significant revenue pool for the banking sector, potentially increasing profits for banks involved in UPI payment processing.

The screenshot shows a tool requesting a UPI ID, the account holder's name, and the amount. It then offers separate QR codes for payments of up to ₹1,999 each.

An example shows ₹4,500 divided across three QR codes. The page promises, “Collect the full amount. Pay ₹0 fees.” It also claims payment details never leave the browser.

However, the screenshot alone does not establish whether the app works or avoids applicable charges. It is also unclear if it's an actual app or just an idea.

Several commenters questioned whether the idea would remain convenient for larger payments. One asked whether sending ₹2 lakh would require entering a UPI PIN around 100 times.

Another warned that repeated payments could attract bank scrutiny. “It can be easily flagged for fraud,” the commenter wrote.

The comment suggested sudden payment bursts could resemble suspicious account activity. These were concerns raised online, not findings about the app.

Others questioned the need for such a tool, noting that personal transfers remain free. Some joked that authorities might eventually charge according to transaction numbers instead.

“Exactly, that’s the catch,” Agarwal replied to a comment raising that possibility.

The discussion also turned to who should fund India's digital payment network. One commenter argued that the government should bear infrastructure costs through existing tax collections.

Agarwal responded that deciding who ultimately pays remained a larger question.

Another suggested that bigger payment companies could offer cashback to attract customers. Agarwal replied, “Scale will become a serious advantage there.”

Charges on UPI payment

The discussion concerns merchant charges, not a new tax on ordinary UPI users. The new framework takes effect on 15 October 2026.

The Finance Ministry says personal transfers remain free, regardless of the amount. Customers making merchant payments will not pay the merchant discount rate (MDR).

Specified merchant payments above ₹2,000 will attract 0.4% MDR, capped at ₹300. Payments up to ₹2,000 and eligible small merchants remain exempt.

Certain essential sectors face a flat ₹5 charge on payments above ₹2,000. The ministry says around 96% of merchant transactions remain unaffected.

About the Author

Sounak Mukhopadhyay covers trending news, sports and entertainment for LiveMint. His reporting focuses on fast-moving stories, box office performance, digital culture and major cricket developments. He combines real-time updates with clear context for everyday readers. <br><br> Sounak brings newsroom experience across breaking news, explainers and long-form features. He has a strong emphasis on accuracy, verification and responsible storytelling. His work tracks audience behaviour, celebrity influence and the business of sport and cinema. He helps readers understand why a story matters beyond the headline. <br><br> Sounak has contributed to widely read digital publications. He continues to build a body of journalism shaped by consistency, speed and editorial clarity. He is particularly interested in the intersection of media, popular culture and public conversation in contemporary India. <br><br> At LiveMint, he writes daily coverage as well as analytical pieces that interpret numbers, trends and cultural moments in accessible language. His approach prioritises factual depth, balanced framing and reader trust. The reporting aligns with modern newsroom standards of transparency and credibility. <br><br> Outside daily reporting, he explores storytelling across formats including podcasts, filmmaking and narrative non-fiction. Through his journalism, Sounak aims to document the rhythms of modern entertainment and sports while maintaining rigorous editorial integrity. <br><br> Sounak continues to develop audience-focused journalism that connects speed with substance in a rapidly-changing information environment. His work seeks clarity, trust and lasting public value in every story he reports.

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