Standard Merchant UPI — ₹2,000
Customer Pays
₹2,000
MDR
₹0
Merchant Receives
₹2,000
Zero MDR — ₹2,000 is the threshold. No deduction. Effective fee: 0.000%
Why ₹2,000 Is Special in UPI MDR
₹2,000 is the zero-MDR threshold in the standard UPI merchant framework. Any eligible P2M (Person-to-Merchant) UPI transaction up to and including ₹2,000 attracts zero MDR for standard merchants.
This threshold was set to encourage small-value digital transactions and reduce the friction merchants face when accepting UPI for everyday low-value purchases.
Transaction Amount = ₹2,000
₹2,000 ≤ ₹2,000 (threshold) → Zero MDR applies
MDR = ₹0
GST = ₹0
Merchant Settlement = ₹2,000
₹2,000 ≤ ₹2,000 (threshold) → Zero MDR applies
MDR = ₹0
GST = ₹0
Merchant Settlement = ₹2,000
What Happens at ₹2,001?
Once a transaction exceeds ₹2,000, standard MDR of 0.4% applies. For ₹2,001, the MDR would be ₹8.004 (0.4% × ₹2,001), and the merchant would receive approximately ₹1,992.56 (without GST).
Use the MDR calculator for ₹2,001 to see the exact breakdown.
MDR is deducted from the merchant settlement — not charged to the customer. The customer always pays ₹2,000.