Types of UPI Merchant Charges
When a merchant accepts UPI payments, the following charges may apply:
1. MDR (Merchant Discount Rate)
The primary processing fee. Ranges from ₹0 (zero-MDR) to 0.4% (max ₹300) depending on category and amount.
2. GST on MDR
18% GST applied on the MDR amount where MDR is applicable. Not on the transaction value.
3. Payment Gateway / PSP Charges
Some payment gateways or PSPs may charge additional fees for their software, API or value-added services. These vary by provider and are separate from standard UPI MDR.
4. Bank Account Charges
Your current account or business account may have transaction fees, NEFT/RTGS charges for fund transfers, or other banking costs. These are separate from UPI MDR.
What Is NOT a UPI Merchant Charge
- P2P transaction charges — zero for both sender and receiver
- Customer-side charges — customers are not directly charged MDR
- UPI PIN or app charges — UPI apps are generally free for consumers
Net Settlement Calculation
Net Merchant Settlement = Transaction Amount − MDR − GST on MDR
(minus any PSP/gateway fees, if separately billed)
Calculate Merchant Settlement →
(minus any PSP/gateway fees, if separately billed)
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 →