UPI Transaction Charges for Merchants
From 15 October 2026, a reported 0.4% MDR applies to specified UPI merchant transactions above ₹2,000, subject to applicable exemptions and categories.
What Does 0.4% MDR Mean?
MDR is a merchant-side payment processing charge. For an eligible ₹10,000 UPI merchant transaction, 0.4% works out to an indicative ₹40.
Merchant Payment
Applies to specified person-to-merchant transactions above ₹2,000.
Customer Payment
The reported MDR is a merchant-side charge, not a standard separate customer UPI fee.
₹300 Cap
The reported standard MDR is capped at ₹300 for transactions above ₹75,000.
How Much Could 0.4% Be?
Simple examples based on the reported standard 0.4% rate before applicable exemptions or special categories.
What About ₹10 Lakh Collection?
100 Transactions × ₹10,000
P2M vs P2P
Person → Merchant
Customer pays a business through UPI. The reported MDR framework covers specified transactions above ₹2,000.
Person → Person
Individual-to-individual UPI transfers are outside the merchant MDR framework.
Not Every UPI Transaction Is Charged
The reported framework has exemptions and special treatment for certain merchants and transaction categories.
Small Merchants
Certain eligible small merchants may remain outside the standard MDR levy.
Special Categories
Some specified categories can have different rates or caps.
P2P Transfers
Person-to-person payments are not part of the merchant MDR framework.
Connect UPI With Your Accounting
BUSY, TallyPrime and ERP systems can help businesses track collections, reconcile bank settlements and record applicable payment charges.
Make Your Accounting UPI-Ready
Kartel Infotech helps businesses customize BUSY, TallyPrime and ERP systems for reconciliation, automation and management reporting.
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