UPI customer charges and merchant MDR are different
Sending money or paying a merchant does not make the payer liable for the merchant's MDR. Keep household payment costs separate from a shop's payment-acceptance costs.
The Department of Financial Services FAQ dated 15 September 2026 sets commencement of the reviewed direct bank-account merchant schedule at 15 October 2026. This simplified tool models that schedule only: there is no date or source selector. At the 30 September 2026 review, these are upcoming rules, not fees already in force. The general eligible rate is 0.4% above 2000, with a 300 per-payment cap; listed essential categories and capital-market merchants use separate rates.
The reviewed schedule preserves consumer, P2P and AutoPay exemptions and qualifying P2PM protections. Confirm merchant classification with the acquiring bank rather than selecting whichever rate looks cheapest. Future changes after this review are not predicted.
How the UPI MDR calculator works
Enter an amount, the number of equivalent payments and a payment category. The calculator finds one payment's MDR, rounds it to paise, then multiplies it by the count. It does not apply the threshold once to an entire month's receipts.
General eligible MDR per payment = min(Payment × 0.4%, 300)Total MDR = Per-payment MDR × Number of equivalent paymentsNet settlement = Gross receipts − Total MDRThe percentage is applied to the whole eligible payment, not only the amount above the threshold. If a month includes different ticket sizes, calculate groups separately. The comparison table keeps the payment category constant to isolate payment size.
Earlier payments, wallets and credit-linked UPI are outside this tool's scope. Check those products' actual pricing with your provider instead of applying this bank-account schedule.
A worked merchant settlement example
For the values loaded on this page, 30 payments of ₹5,000 produce gross receipts of ₹1,50,000. The modeled MDR is ₹20 per payment, totaling ₹600. Net settlement after MDR alone is ₹1,49,400.
This example uses the selected bank-account category under the schedule effective 15 October 2026. It excludes taxes, refunds and other service costs. Recalculate to update the dashboard; the reading example reflects the scenario used when loading the page.
Check the category and actual settlement statement
Use your acquiring bank's category assignment and provider agreement. Essential-sector selections here cover categories explicitly identified in the reviewed material, such as fuel, insurance, telecom, railways, agricultural inputs and designated utilities. Education and other ambiguous category treatments require confirmation, not an assumed flat fee.
Compare the result with MDR lines on the actual statement. Soundbox rent, payment-gateway service pricing and GST treatment are separate questions. No universal extra tax or platform fee is automatically added by this tool.
Primary references: Ministry of Finance MDR FAQ, Ministry of Finance framework summary, and NPCI's historical PPI interchange clarification. The 2023 clarification is background, not the later schedule's commencement document.
Frequently asked questions
Who pays UPI MDR: the customer or the merchant?
MDR is a merchant payment-acceptance charge, not an extra UPI charge to the payer. The Ministry of Finance framework reviewed on 30 September 2026 keeps consumer UPI usage free and says merchants cannot pass this MDR to customers. Separate credit-product or other service costs are outside this calculator.
Which rules does this simplified calculator use?
This calculator models the direct bank-account UPI schedule effective 15 October 2026 in the Department of Financial Services FAQ dated 15 September 2026. There is no payment-date or source input. As of the 30 September 2026 review, this is an upcoming-rules estimate, not a claim that these fees already apply. Earlier payments, credit-linked UPI and wallets are outside its scope; future changes are not forecast.
What happens at the 2000 payment threshold?
Under the reviewed bank-account framework, payments up to and including 2000 have zero MDR. An eligible general P2M payment above 2000 uses 0.4% of the whole payment, capped at 300 per transaction. It is not a fee calculated only on the excess above the threshold.
Are small merchants, P2P and AutoPay exempt?
The reviewed FAQ exempts person-to-person UPI, UPI AutoPay or mandates, and qualifying P2PM merchants. P2PM eligibility depends on bank classification and the applicable collection rules; do not assume exemption simply because one month's receipts are low. Confirm your assigned category with your acquiring bank.
How do essential-sector and capital-market rates differ?
The reviewed framework provides a 5 flat MDR for eligible payments above 2000 in listed essential or industry-program sectors, and a 0.02% rate capped at 300 for capital-market merchants. The tool keeps payments at or below 2000 exempt. Ambiguous or unlisted sectors need bank confirmation rather than an assumed flat fee.
Does the same rate apply to RuPay credit cards or wallets on UPI?
No. This simplified calculator covers direct bank-account UPI only. Credit-linked UPI operates under separate credit-product rules, and wallet PPI interchange is different from merchant MDR. Check your provider's quote rather than applying this calculator's exemptions and caps to those products.
Are GST, gateway costs or soundbox rent included?
No. The tool estimates MDR only and does not automatically add GST, payment-gateway charges, soundbox rent, refunds or settlement adjustments. Check your provider's actual invoice and applicable tax treatment; net settlement here means receipts minus the modeled MDR only.
Can I use monthly turnover to calculate my total MDR?
Not with one universal percentage: thresholds and caps apply per transaction. Enter a payment amount and the number of payments of that same amount. For different ticket sizes, calculate each group separately and add the MDR totals. Shared links include payment amounts, counts and assumptions; share accordingly.