UPI MDR Calculator 2026
Work out exactly what the new Merchant Discount Rate will cost your business. A 0.4% MDR on UPI Person-to-Merchant payments above ₹2,000, capped at ₹300 per transaction, was due on 15 October 2026, but NPCI deferred it on 13 October to a post-Diwali date it has yet to notify. The rates have not changed, so the numbers below apply once it starts. Customers pay nothing.
Last updated: October 2026 · Sources: NPCI FAQs on UPI MDR, dated 15 September 2026; NPCI deferral statement, 13 October 2026
Total value you receive from customers each month via UPI.
Tickets of ₹2,000 or less attract no MDR at all.
Retail, restaurants, e-commerce and most other merchants.
NPCI says payments of ₹2,000 or less are over 95% of UPI merchant volume, so for most shops this share is small.
What does UPI MDR cost at each ticket size?
These four rows are the worked examples NPCI published in its own FAQ. Note the cap: past ₹75,000 the fee stops growing, so the effective percentage keeps falling.
| Transaction amount | Applicable MDR | Merchant pays |
|---|---|---|
| ₹2,000 | Nil | ₹0 |
| ₹3,000 | 0.40% | ₹12 |
| ₹50,000 | 0.40% | ₹200 |
| ₹75,000 and above | Capped | ₹300 |
Source: NPCI FAQs on UPI MDR, 15 September 2026. Figures exclude GST on the fee.
Rates by merchant category
| Category | MDR above ₹2,000 |
|---|---|
| Standard merchants | 0.40%, capped ₹300 |
| Railways, telecom, insurance, fuel | Flat ₹5 |
| Capital markets, mutual funds, broking | 0.02%, capped ₹300 |
| Schools, colleges, exam bodies | Concessional or capped, rate not yet notified |
| Small merchants, P2PM, up to ₹1 lakh a month | Zero |
| All Person-to-Person transfers | Zero, any amount |
| RuPay credit card on UPI, credit lines | Outside this framework |
Source: NPCI FAQs on UPI MDR, 15 September 2026. Category parameters are set by the UPI and Services Steering Committee headed by NPCI.
Frequently asked questions
What is the new UPI MDR, and when does it start?
It did not start on 15 October 2026 as first announced. On 13 October 2026 the UPI and Services Steering Committee deferred it, and NPCI said MDR on select Person-to-Merchant payments will be implemented immediately post Diwali on a date to be notified separately. NPCI announced no change to the rates: 0.4% on Person-to-Merchant UPI transactions above ₹2,000, capped at ₹300 per transaction for payments of ₹75,000 and above, as set out in its FAQ dated 15 September 2026. Payments of ₹2,000 or less stay free, and NPCI says those account for more than 95% of UPI merchant transaction volume. Person-to-Person transfers remain free at every value.
Do customers pay the UPI MDR?
No. MDR is charged to the merchant, not the customer. NPCI has stated that consumers continue to use UPI free of cost regardless of transaction size, that UPI apps are expressly prohibited from levying any platform fee, and that merchants are not permitted to pass the MDR on to customers as a surcharge. You pay the listed price for goods and services.
Is MDR a tax?
No. NPCI has been explicit that MDR is not a tax or a fee collected by the Government. It is a commercial fee distributed among the participants that carry the transaction: the issuing bank receives roughly 40%, the merchant acquirer about 30%, the UPI app about 20%, and the remainder goes to the app sponsor bank. The stated purpose is funding payment infrastructure, cybersecurity and fraud prevention.
Is GST charged on the UPI MDR?
On the fee, very likely yes. The NPCI FAQ of 15 September 2026 says its rates are exclusive of GST as applicable from time to time (quoted by Business Standard on 16 September 2026), and payment-service charges attract GST at 18%. On 17 September 2026 government sources cited by ANI dismissed reports of a separate new GST on MDR and said businesses can claim full input tax credit against the regular GST on the fee. We found no CBIC circular on UPI MDR as of 15 October 2026, so this calculator shows the fee and an 18% line separately. GST never applies to the payment amount itself.
Which merchants are exempt from UPI MDR?
Small merchants in the P2PM category who receive up to ₹1,00,000 per month through UPI QR codes pay zero MDR, and NPCI has confirmed that GST registration is not required to qualify. Eligibility depends on monthly collection thresholds and merchant categorisation. Existing QR codes keep working and do not need to be replaced or upgraded.
What does UPI MDR cost on a ₹3,000 payment?
The standard rate of 0.4% on a ₹3,000 transaction is ₹12. NPCI uses exactly this example in its FAQ. Adding 18% GST on the fee brings the merchant cost to about ₹14.16. On ₹50,000 the MDR is ₹200, and at ₹75,000 and above it is fixed at the ₹300 cap, which means the effective percentage falls as ticket size rises beyond ₹75,000.
How does UPI MDR compare with card charges?
It is much cheaper. Credit card MDR typically runs between 1.5% and 2.5%, and debit card MDR is capped at up to 0.90%. UPI at 0.4% with a ₹300 per-transaction ceiling remains the lowest-cost digital acceptance route in India, and the cap has no equivalent on most card products, so large-ticket payments are dramatically cheaper on UPI.
Are RuPay credit cards on UPI covered by this MDR?
No. NPCI has clarified that credit-linked UPI payments, including RuPay credit cards linked to UPI and pre-sanctioned bank credit lines, fall outside this framework. They continue to operate under the existing credit card and credit product guidelines and their own MDR structures, which are generally higher than 0.4%.
Data sources: NPCI FAQs on UPI MDR dated 15 September 2026; NPCI statement of 13 October 2026 deferring implementation to a post-Diwali date (as reported by PTI and Business Standard, 13 October 2026); Business Standard, 16 September 2026, quoting the NPCI FAQ that rates are exclusive of GST; The Week, 17 September 2026, citing ANI on the Centre's position on GST and input tax credit; Ministry of Finance PIB release of 18 April 2025 on GST and UPI (Release ID 2122747); Ministry of Finance notification of September 2026 under the Payment and Settlement Systems Act specifying RuPay debit and UPI up to ₹2,000 as charge-free electronic modes.
Last updated: October 2026. Written by Munir Afridi.
Disclaimer: This is general information, not tax or financial advice. The MDR start was deferred on 13 October 2026 to a post-Diwali date not yet notified, and operational parameters are still being finalised by the UPI and Services Steering Committee and the RBI. The 18% GST line is shown because the NPCI FAQ says its rates are exclusive of GST and payment-service fees attract GST at 18%; no CBIC circular has been issued, so confirm the final treatment and your input tax credit position with your acquiring bank, payment aggregator or a chartered accountant.