Overview Comparison
| Feature | UPI MDR | Credit Card MDR |
|---|---|---|
| Rate (standard) | 0.4% (above ₹2,000) | 1.5% – 2.5% typical |
| Rate (small value) | Zero (≤ ₹2,000) | Same rate applies |
| Cap per transaction | ₹300 | No standard cap (varies) |
| GST on MDR | 18% on MDR | 18% on MDR |
| P2P transfers | Zero MDR | Not applicable |
Why UPI Is Generally More Merchant-Friendly
- Lower rates: 0.4% vs 1.5–2.5% for credit cards
- ₹300 cap: On large transactions, the cap limits total MDR exposure
- Zero MDR threshold: Transactions ≤ ₹2,000 are free
- P2P is free: Personal transfers attract no MDR
- Essential sector pricing: ₹5 flat is extremely low for high-value transactions
When Credit Cards May Have Advantages
- Credit cards offer consumers credit — UPI requires funds in account
- Credit card rewards and EMI attract certain customer segments
- International transactions — UPI is primarily India-domestic
Practical Example: ₹10,000 Transaction
UPI (standard merchant): MDR = ₹40 (0.4%). Credit card (2%): MDR = ₹200. Difference = ₹160 per transaction in favour of UPI. Over 1,000 such transactions: saving = ₹1,60,000/month.
Calculate UPI MDR →Information based on official sources verified as of 18 September 2026. Rules are subject to change. Always verify with NPCI, your bank or a financial advisor. View sources →