UPI MDR did not take effect on 15 October 2026. On 13 October, NPCI announced that MDR on select Person-to-Merchant (P2M) UPI transactions will be implemented immediately after Diwali, on a date to be notified separately. Customers continue to pay no UPI fee.
The published framework remains the reference schedule: for most qualifying P2M payments above ₹2,000, the standard rate is 0.4%, capped at ₹300 for transactions of ₹75,000 and above. P2P payments and qualifying P2PM small merchants remain at zero MDR. The table and calculator below show the announced framework; the deferred P2M MDR is not yet in force.
The September framework originally set 15 October 2026 as the start date. That rollout has now been deferred. NPCI announced on 13 October that MDR on select P2M UPI transactions will be implemented immediately after Diwali, on a date to be notified separately. The consumer side remains free under the published framework.
When the framework is implemented, the published standard rate for a qualifying P2M payment above ₹2,000 is 0.4% of the bill. On ₹3,000 that is ₹12. On ₹10,000 it is ₹40. On ₹1 lakh it would be ₹400, but the ₹300 cap applies from ₹75,000. Payments of ₹2,000 or less remain at zero MDR under the published schedule.
Qualifying P2PM small merchants are treated separately and remain at zero MDR under the published framework. Specified categories such as fuel, railways, telecom and insurance use a flat ₹5 above ₹2,000 instead of the standard 0.4%. Credit-linked UPI payments, including RuPay credit cards linked to UPI, follow separate credit-product rules.
MDR means Merchant Discount Rate. In plain words: when you pay a shop by UPI, a sliver of that sale can be kept by the banks and apps that moved the money. That sliver comes out of the shop’s settlement, not out of your bank balance.
Under the published framework, the standard rate is 0.4% for a qualifying P2M payment above ₹2,000, with a maximum MDR of ₹300 for transactions of ₹75,000 and above. P2P transfers, P2M payments up to ₹2,000 and qualifying P2PM small merchants remain at zero MDR. The new P2M MDR rollout is currently deferred.
This is not a government tax. The official framework describes MDR as a merchant-side payment processing charge. If DFS, NPCI or another competent authority changes the framework, the figures on this page will need to change with it. Do not treat an old printed copy as live guidance.
Choose the type of shop, type the bill the customer pays, and the box shows the MDR the shop would pay under the published table. It is only arithmetic. It cannot tell you how your bank has labelled your QR.
These figures follow the Department of Financial Services FAQ dated 15 September 2026. NPCI’s 13 October update addresses the rollout timing and says the implementation date will be notified separately. If later official guidance changes a rate or category, use that guidance rather than this table.
| Payment | MDR the merchant pays | Notes |
|---|---|---|
| P2P, any amount | ₹0 | Includes self-transfer between own UPI IDs |
| P2M up to ₹2,000 | ₹0 | Most kirana / chai / bus-ticket size payments |
| P2M above ₹2,000 | 0.4% | Standard rate |
| P2M ₹75,000 and above | ₹300 maximum | ₹1 lakh would be ₹400 at 0.4%; cap cuts it to ₹300 |
| Essentials above ₹2,000 | Flat ₹5 | Railways, telecom, insurance, fuel, agricultural inputs, electricity / water / PNG (FAQ Q33, Q41) |
| Capital-market UPI | 0.02%, cap ₹300 | Mutual funds, securities, brokers — as notified |
| P2PM small merchant | ₹0 | Up to ₹1 lakh / month via QR into own account |
| UPI AutoPay / mandates | ₹0 (as reported) | Recurring SIPs, some utilities and subscriptions |
| Credit-linked UPI (RuPay credit on UPI, credit line) | Not this schedule | Follows card / credit-product MDR, not the 0.4% bank-UPI table |
| Bill | 0.4% | Payable MDR |
|---|---|---|
| ₹2,000 | — | ₹0 |
| ₹3,000 | ₹12 | ₹12 |
| ₹10,000 | ₹40 | ₹40 |
| ₹50,000 | ₹200 | ₹200 |
| ₹75,000 | ₹300 | ₹300 |
| ₹1,00,000 | ₹400 | ₹300 cap |
A small shop that collects UPI on its own QR, into its own account, and stays within ₹1 lakh a month is treated as P2PM. On the published FAQ that shop pays zero MDR, even if one customer pays ₹5,000.
The official DFS FAQ compared UPI MDR with older card MDR. Approximate merchant cost:
| Rail | Typical merchant cost |
|---|---|
| UPI P2M ≤ ₹2,000 | ₹0 |
| UPI P2M > ₹2,000 | 0.4%, max ₹300 |
| Debit card | Up to about 0.90% (as cited in NPCI comparison reporting) |
| Credit card | Often about 1.5–2.5% |
Whether you are a “small QR shop” is decided by the bank or app that gave you the code, not by how the shop looks. If they have marked you P2PM and UPI into that account stays within ₹1 lakh a month, the published FAQ says you pay zero MDR even when one bill is above ₹2,000.
Do not assume “kirana means free.” A clinic, tuition class or distributor on a full P2M QR follows the 0.4% table even if the shop looks small.
The 15 September 2026 DFS FAQ does not specify the GST treatment of MDR under this framework. This site therefore does not add GST to the calculator or present a GST amount as part of the official UPI MDR schedule.
If official tax guidance later specifies how GST applies to these charges, that treatment should be checked separately from the MDR rate itself. The calculator on this page shows MDR only.
Short answers to the questions people actually type: is UPI still free, who pays the 0.4%, what a small shop pays, and whether a surcharge on the bill is allowed. These follow the DFS FAQ of 15 September 2026 together with the latest NPCI rollout update.
Yes. The 15 October merchant MDR rollout was deferred, and consumers continue to pay no UPI fee under the published framework. The merchant-side MDR, when implemented for qualifying transactions, is not a customer charge.
Not as a UPI app fee. The published FAQ says the apps cannot add a platform charge on a UPI payment. You still pay ₹0. If you pay with a credit card sitting on UPI, that follows card rules, not this 0.4% table.
No monthly “20 free UPI transfers” quota for people. A bank can still cap how much you send in a day for fraud control. That is a different limit.
No. Person-to-person (P2P) transfers stay free at any amount, including self-transfer between your own accounts.
No. You pay the amount on the screen. MDR, if any, is taken from the shop’s settlement, not added as a customer fee on PhonePe, Google Pay or Paytm.
Yes. Person-to-merchant UPI up to ₹2,000 has no MDR. Everyday tea, auto and kirana scans stay free for both sides on that slice.
The official FAQ says merchants should not pass MDR to the buyer. If a shop still adds a “UPI surcharge,” that is the shop’s extra, not the official customer fee.
NPCI has said prescribed MDR does not apply to UPI Mandate / AutoPay recurring payments, including some SIPs and subscriptions. Confirm the live FAQ if you pay rent this way.
MDR is the merchant-side processing charge described for qualifying UPI payments. Under the published framework, the standard rate is 0.4% above ₹2,000, capped at ₹300 for transactions of ₹75,000 and above. The rollout of this new P2M MDR is currently deferred.
The same merchant-side fee. People search both phrases. The September framework described MDR on selected P2M UPI transactions, but the originally announced 15 October rollout has been deferred.
The rollout did not begin on 15 October. Under the announced framework, when implementation begins, the merchant bears MDR on qualifying P2M transactions. The customer continues to pay the posted price.
On the standard 0.4% table: ₹3,000 → ₹12; ₹50,000 → ₹200; ₹1 lakh would be ₹400 at 0.4% but the cap makes it ₹300.
Many small QR shops that collect up to ₹1 lakh a month into their own account stay at zero. One ₹5,000 bill does not by itself push them onto the 0.4% table. Ask the bank that printed the QR which class you are in. Do not guess from the size of the shutter.
On those lines the published shop fee is a flat ₹5 when the payment is above ₹2,000, not 0.4%. So a ₹10,000 fuel payment is ₹5 for the pump, not ₹40.
No. The official FAQ says existing QR infrastructure can continue and does not require replacement or re-registration solely because of the MDR framework. The rollout deferral does not change that.
No. Paying a shop with a RuPay credit card sitting on UPI follows card charges, not this 0.4% UPI table.
Yes. NPCI announced on 13 October that implementation will take place immediately after Diwali, on a date to be notified separately. The originally announced 15 October rollout did not go ahead.
No. It is a processing fee on some shop payments. It is not a tax added on your QR. This page only lists the published schedule.
The 15 October rollout was deferred. Under the published framework, MDR is a merchant-side charge and should not be added to the customer’s bill as an official UPI fee.
Ask the bank or app that issued the QR. See the short checklist above. Do not decide from GST registration or shop size alone.
The new MDR rollout was deferred, so do not assume an unfamiliar settlement deduction after 15 October is this new MDR. Confirm the fee with the bank or acquirer that issued the QR.
The 15 September DFS FAQ does not specify GST treatment of MDR. This site therefore keeps GST outside the calculator and does not present a GST amount as part of the official MDR schedule.
Standard P2M above ₹2,000: ₹5,000 → ₹20; ₹10,000 → ₹40. Use the calculator for other amounts. Flat-₹5 sectors and P2PM shops are different.
Official FAQ Q41: electricity, municipal water and piped natural gas above ₹2,000 use a flat ₹5, not 0.4%. Rail, telecom, insurance, fuel and agricultural inputs are also in that flat-₹5 group. Education fees (Q42) are an industry-program category with a flat or capped rate — the FAQ does not print ₹5 for schools. Ask the acquirer which code they applied.
The published FAQ says MDR should not be passed to the buyer as a UPI line. You can refuse the extra, pay another way, or note the shop and bill. This site cannot file an NPCI complaint for you.
Some banks print the deducted MDR as “recovery” on the settlement. It is the same merchant fee, not a second charge and not a customer tax. Match the amount to the bill. Ask the bank that issued the QR if the label is unclear. This page cannot reverse a deduction.
The published schedule is the official DFS FAQ, not a private Axis rate card. The settlement may use the bank’s own label. Use the same 0.4% / ₹5 / P2PM rules unless that bank’s notice says otherwise.
On 28 September, the Supreme Court declined an interim stay and sought replies from the Centre, RBI and NPCI. Separately, on 13 October, NPCI deferred implementation until immediately after Diwali, with the date to be notified separately. A rollout deferral is not the same as a court stay.
We update this page when NPCI, the Finance Ministry, or a court changes the UPI MDR framework. Newest first.