UPI MDR calculator

See the exact Merchant Discount Rate (MDR) fee on a UPI payment, and what the merchant actually receives.

Last reviewed: August 2026 · Figures are estimates for general planning only — see the explanation below for this calculator's specific assumptions.

on a ₹5,000 UPI payment, the MDR works out to ₹20.00 (0.4%, capped at ₹300 per transaction.) — the merchant receives ₹4,980, and the customer still pays the full ₹5,000.

What is UPI MDR?

MDR (Merchant Discount Rate) is a fee a merchant's bank deducts from a UPI payment before settling it to the merchant's account. Under NPCI's framework effective 15 October 2026, a 0.4% MDR applies to Person-to-Merchant (P2M) UPI transactions above ₹2,000, capped at ₹300 per transaction (the cap kicks in from ₹75,000 onward, since 0.4% of ₹75,000 is exactly ₹300). Transactions of ₹2,000 or below carry no MDR at all — and per NPCI, this covers more than 95% of all P2M transaction volume, so the great majority of everyday UPI payments are entirely unaffected.

Consumers never pay this — it's important to be clear about that

This fee is charged to the merchant, not the customer, and merchants are explicitly barred from passing it on to you at the till. Whatever price is listed is what you pay, whether the merchant is charged an MDR on that sale or not. P2P transfers between individuals — sending money to friends and family — remain completely free, regardless of amount, and always have been.

Who's exempt or pays a different rate

Small merchants operating under NPCI's P2PM category (receiving up to ₹1 lakh a month via UPI QR directly into their personal account) pay zero MDR regardless of transaction size — this protects street vendors, small shops, and other micro-merchants from any fee at all. Specific sectors — railways, telecom, insurance, fuel, government utility bills, and education fee collections — pay a flat ₹5 per transaction above ₹2,000 instead of the 0.4% rate, so a large payment in these categories doesn't scale into a large fee. Capital market transactions (mutual fund purchases, securities, and broker/dealer payments) get their own lower 0.02% rate, also capped at ₹300.

Why the numbers here might change

NPCI has revised UPI's fee framework before (UPI ran on zero MDR from January 2020 until this October 2026 change), and the specific rate, threshold, and cap values used by this calculator are stored as configurable settings rather than fixed in code, specifically so they can be kept current if NPCI revises them again without waiting on a software update.

Frequently asked questions

Will I be charged extra when I pay via UPI?

No. MDR is charged to the merchant by their bank, not to you, and merchants are explicitly barred from passing it on to customers. You pay the exact listed price whether or not the merchant is charged an MDR on that specific sale.

When does this UPI MDR framework take effect?

15 October 2026, per NPCI's official FAQ released 15 September 2026. Transactions before that date are not affected.

Do small shopkeepers and street vendors have to pay this fee?

No — merchants under NPCI's P2PM category (receiving up to ₹1 lakh a month via UPI QR directly into a personal account) are exempt from MDR entirely, regardless of individual transaction size. This is specifically meant to protect small, unorganised-sector merchants.

Is there any MDR on small UPI payments?

No. Any Person-to-Merchant transaction of ₹2,000 or below carries zero MDR — and per NPCI, this covers more than 95% of all P2M transaction volume, so almost all everyday UPI purchases are unaffected.

Common questions answered

Your recent searches

Loading…

What people are doing