UPI MDR calculator: understand the merchant fee before you accept payments
Merchant Discount Rate (MDR) is the fee a payment network can deduct from a merchant’s UPI settlement. It affects your margin, pricing and cash flow, but it is not an extra charge added to the customer’s bill. This calculator models the UPI MDR framework described for payments from 15 October 2026, including the ₹2,000 eligibility threshold, category rates, caps and small-merchant treatment.
Frequently asked questions
UPI MDR calculator: what do I enter, and what comes back?
A UPI MDR calculator exists to show you what a UPI payment actually pays you, not what the customer paid. Enter the transaction amount and the tool applies the framework effective 15 October 2026: 0.4% on standard-merchant P2M payments above ₹2,000, with the fee capped at ₹300; a flat ₹5 per transaction for essential sectors such as railways, telecom, insurance, fuel and agricultural inputs; and 0.02% for mutual funds, securities and stockbroking. Back out the fee and you get the amount that actually lands in your bank account, which is the number to build your price on. Use the monthly volume and per-transaction size you actually see, because a shop taking ₹500 payments by QR pays nothing while one taking ₹25,000 through a standard merchant QR pays 0.4% of every one of them.
Will UPI customers be charged the MDR?
No separate MDR is added to the customer’s payment in the framework modelled here. MDR is deducted from the merchant payout, so the customer sees the amount they authorised. Confirm any bank or aggregator-specific charge in your settlement terms.
Which UPI payments attract the standard MDR from 15 October 2026?
For a standard merchant, Person-to-Merchant (P2M) UPI payments above ₹2,000 attract 0.4% MDR, capped at ₹300. Payments up to ₹2,000, all P2P transfers, and small merchants under the P2PM framework receiving up to ₹1 lakh per month via QR remain free; special sectors can have different rates.
Are all sectors charged 0.4%?
No. Railways, telecom, insurance, fuel and agricultural inputs pay a flat ₹5 per transaction above ₹2,000, while mutual funds, securities and stockbroker payments pay just 0.02% (capped at ₹300).
Who actually pays the MDR on a UPI transaction?
The merchant pays it. The fee is deducted from the settlement amount the merchant receives, so customers see no extra charge. Merchants also cannot legally recover it from the customer.
How is the MDR fee calculated in this tool?
Enter the payment amount and pick your merchant category. For an eligible standard-merchant transaction above ₹2,000, the tool applies 0.4% to the full transaction amount, capped at ₹300. Essential-sector merchants and capital-market merchants follow their own ₹5 flat or 0.02% rules.
I am a small shop with QR payments. Will I be charged?
Under the Small Value P2PM framework, merchants receiving up to ₹1 lakh per month via QR will not pay MDR. Higher-volume shops fall under the standard rate above ₹2,000 per transaction.
I need help deciding my merchant category or settlement impact. What now?
Settlement rules depend on your bank and payment aggregator. Email rautprajwal36@gmail.com with your monthly volume and we will help you estimate the impact correctly.
UPI MDR kya hota hai? Kya mujhe customer se lena padega?
UPI MDR (Merchant Discount Rate) woh chhoti fee hai jo aapke UPI settlement se automatically kat jaati hai — customer se aap kuch nahi maang sakte, aur customer ko bhi koi extra charge nahi dikhta. 15 October 2026 se P2M (person-to-merchant) UPI par ₹2,000 se upar ke payment par 0.4% MDR lagega, jiski maximum limit ₹300 hai. ₹2,000 tak ke payment, saare P2P transfer, aur chhote QR dukan (mahine mein ₹1 lakh tak QR se payment) par MDR nahi hai. Railway, telecom, insurance, fuel aur kisan inputs jaise sectors par ₹5 ka fixed charge hai. Iska matlab hai ki jo extra aap UPI se receive karte hain, usse hata kar apni margin nikalna hai — isliye apne prices mein MDR ka hisaab pehle se daal lijiye, warna margin chupke se kam ho jayega.