UPI MDR Calculator
From 15 October 2026, shops start paying a small fee on UPI payments above ₹2,000. Type the payment amount to see what the shop is charged and what actually reaches its account. Customers pay nothing — this fee never appears on your bill.
What the customer pays the shop in one UPI payment.
Working: 3,000 × 0.4 ÷ 100 = 12
Runs on your own device — nothing you type is sent anywhere.
What changes on 15 October 2026
Until now, a shop taking a UPI payment paid nothing to receive it. That is what made UPI different from card machines, where the shop loses roughly 1.5% to 2.5% on a credit card sale. From 15 October 2026, shops start paying a fee on larger payments. The fee has a name — MDR, short for Merchant Discount Rate — and it simply means the cut the shop's bank keeps for handling the payment.
Three things are worth knowing straight away:
- Small payments stay free. Anything up to ₹2,000 costs the shop nothing. NPCI says that covers more than 95 out of every 100 UPI payments to shops.
- The customer is not charged. Not a fee, not a surcharge, nothing. Shops are specifically barred from passing it on, and UPI apps are barred from adding their own charge.
- There is a ceiling. However large the payment, the fee stops at ₹300.
The fee is worked out on the whole payment once it goes over ₹2,000 — the first ₹2,000 is not carved out first. So a ₹3,000 payment is charged 0.4% of ₹3,000, not 0.4% of ₹1,000.
The four rates, in plain terms
| Who is being paid | Fee on payments above ₹2,000 | Most it can ever be |
|---|---|---|
| Most shops and businesses | 0.4% of the payment | ₹300 |
| Petrol pumps, railways, phone and internet, insurance, electricity and water bills | A flat ₹5 | ₹5 |
| Mutual funds, shares, stockbrokers | 0.02% of the payment | ₹300 |
| Small shops paid into a personal account, under ₹1 lakh a month | Nothing | — |
Schools and colleges also sit in the group that gets a flat or capped fee rather than the full 0.4%, but NPCI has not published the exact figure for them yet, so this calculator does not guess one.
Why the ceiling matters more than the rate
The 0.4% only runs until the fee hits ₹300. Work out where that happens and you get a clean number: ₹300 ÷ 0.4% = ₹75,000. So every payment of ₹75,000 or more costs the shop exactly ₹300 — no more.
That makes the fee shrink, in percentage terms, the bigger the sale gets. A ₹1,00,000 payment would have cost ₹400 at a straight 0.4%; the ceiling holds it at ₹300, which works out at 0.30% of the sale. For a jeweller or an electronics shop, that is the difference that matters.
The same ceiling applies to mutual funds and shares, but their rate is twenty times lower, so it takes a payment of ₹15,00,000 before the fee reaches ₹300.
What the fee works out to at common amounts
Every figure below is worked out by the same formula the calculator uses.
| Payment | Most shops (0.4%) | Shop receives | Fuel, rail, telecom, insurance, utilities | Mutual funds and shares (0.02%) |
|---|---|---|---|---|
| ₹500 | Free | ₹500 | Free | Free |
| ₹2,000 | Free | ₹2,000 | Free | Free |
| ₹2,500 | ₹10 | ₹2,490 | ₹5 | ₹0.50 |
| ₹3,000 | ₹12 | ₹2,988 | ₹5 | ₹0.60 |
| ₹5,000 | ₹20 | ₹4,980 | ₹5 | ₹1 |
| ₹10,000 | ₹40 | ₹9,960 | ₹5 | ₹2 |
| ₹25,000 | ₹100 | ₹24,900 | ₹5 | ₹5 |
| ₹50,000 | ₹200 | ₹49,800 | ₹5 | ₹10 |
| ₹75,000 | ₹300 | ₹74,700 | ₹5 | ₹15 |
| ₹1,00,000 | ₹300 | ₹99,700 | ₹5 | ₹20 |
| ₹5,00,000 | ₹300 | ₹4,99,700 | ₹5 | ₹100 |
The 0.4% column stops rising at ₹300 once the payment reaches ₹75,000.
Who pays, and who carries on paying nothing
Whether a shop is charged does not depend on how much it sells in a year. It depends on the kind of account the money arrives in.
- Small traders (the P2PM category). A tea stall, a vegetable seller, a small kirana — payments go into a personal account and nothing is deducted, on any payment. This holds as long as no more than ₹1 lakh a month comes in.
- When a small shop grows. If more than ₹1 lakh a month arrives for three months running, the bank moves the shop into the ordinary merchant category. From then on the fee applies to its payments above ₹2,000.
- Ordinary merchants. Anyone on a proper merchant account pays the rate for their trade, on payments above ₹2,000.
Nothing has to be done to existing QR codes or soundboxes — they keep working exactly as they do now.
Checked against NPCI's own examples
NPCI published a short table of worked figures. This calculator reproduces each one exactly — a useful check that the maths here matches the rule as written.
| Payment | NPCI's published fee | This calculator |
|---|---|---|
| ₹2,000 | Nil | Nil |
| ₹3,000 | ₹12 | ₹12 |
| ₹50,000 | ₹200 | ₹200 |
| ₹75,000 | ₹300 | ₹300 |
| ₹1,00,000 | ₹300 | ₹300 |
Frequently asked questions
Will I pay anything extra when I pay by UPI?
No. Nothing changes for the person paying. UPI stays free for you, whatever you spend and however often you use it. The new fee is paid by the shop to its own bank, out of the money it receives. Shops are also not allowed to add the fee to your bill, so the price on the tag is the price you pay.
Which UPI payments still cost the shop nothing?
Four kinds. Money sent to another person is always free. Any payment of ₹2,000 or less to a shop is free. Small shops that take payments into a personal account and receive up to ₹1 lakh a month stay free on everything. And standing instructions — the automatic monthly payments people set up for bills, subscriptions or investments — carry no fee either.
Is the fee charged on the whole payment or only the part above ₹2,000?
On the whole payment. This catches people out. A ₹3,000 payment is charged 0.4% of ₹3,000, which is ₹12 — not 0.4% of the ₹1,000 above the limit. The ₹2,000 figure decides whether there is a fee at all; it is not subtracted first. That is NPCI's own published example.
Why does a ₹1,00,000 payment cost the same as a ₹75,000 one?
Because of the cap. The fee is 0.4% until it reaches ₹300, and then it stops. 0.4% of ₹75,000 is exactly ₹300, so every payment of ₹75,000 or more costs the shop the same ₹300. Without the cap, a ₹1,00,000 payment would cost ₹400. The bigger the payment, the smaller the fee looks as a share of it.
How does a small shop know if it counts as small?
It is decided by the bank account the money lands in, not by how much the shop sells. Small traders are set up in a category called P2PM, where payments go straight into a personal account and there is no fee. If more than ₹1 lakh a month arrives for three months in a row, the bank moves the shop into the normal merchant category, and the fee starts applying to payments above ₹2,000. Shops do not need to change their QR code or re-register for any of this.
Which businesses pay only ₹5?
Railways, phone and internet companies, insurance companies, petrol pumps, and public utility bills such as electricity, municipal water and piped gas. These pay a flat ₹5 on payments above ₹2,000, no matter how large the payment is, because the rates in these trades are thin and the bills can be big. Below ₹2,000 they pay nothing, same as everyone else.
What about paying with a credit card through UPI?
That is a different thing and this calculator does not cover it. When a RuPay credit card or a pre-approved credit line is linked to UPI, the payment is a short-term loan from the bank, so it follows the usual credit card fee rules instead. The fee here applies to ordinary UPI payments that move money straight from one bank account to another.
Is GST added on top of this fee?
NPCI's published answers do not say, so this calculator does not assume it. Fees for payment services normally carry GST, and a GST-registered business can usually claim that back. Tick the GST box to see what the figure would look like with 18% added, but confirm the exact treatment with your own bank or payment provider before you rely on it for your books.
When does this start?
15 October 2026. Until then every UPI payment to a shop is still free. The rules on this page come from NPCI's own list of answers, published on 15 September 2026.
Sources
Every rate, limit and date on this page comes from the National Payments Corporation of India's own published answers, checked on 19 September 2026:
- NPCI — Merchant Discount Rate (MDR) on Select UPI (P2M) Transactions: Frequently Asked Questions, 15 September 2026 — the primary document. It sets the 0.4% rate above ₹2,000, the ₹300 ceiling from ₹75,000, the flat ₹5 for railways, telecom, insurance, fuel and utilities, the 0.02% rate for capital markets, the zero-fee P2PM category and its ₹1 lakh monthly limit, and the 15 October 2026 start date.
- NPCI — UPI circulars — where the binding circulars are published. Check here for any change after the date above.
One thing this page deliberately does not repeat: several news reports describe the exemption as applying to businesses under a ₹1.5 crore yearly turnover. That figure does not appear in NPCI's document, which sets the exemption by account category and a ₹1 lakh monthly limit instead. We have followed the source.