UPI P2M Charges: What Merchants Pay
Merchant UPI payments of ₹2,000 or less remain free. Specified merchant transactions above ₹2,000 can attract MDR of 0.4% once NPCI notifies the post-Diwali start date (originally 15 October 2026), capped at ₹300 per transaction. Eligible small merchants can remain outside MDR.
UPI MDR explained →At a glance
- Up to ₹2,000
- No MDR
- Above ₹2,000 (specified)
- 0.4% MDR after the post-Diwali start date (TBA)
- Maximum per transaction
- ₹300
- Eligible small merchants
- Can remain outside MDR
Who this affects
Any business accepting UPI through a QR code, payment link, app checkout or aggregator. Your exact position depends on the merchant category and classification applied by your acquiring bank or aggregator — not on your own view of your size.
Merchant categories, MDR and exemptions
✓ Official source — NPCI UPI circulars · View · Verified 13 October 2026
Estimating the cost on your ticket size
| Average ticket | Indicative MDR per transaction | Comment |
|---|---|---|
| ₹350 (café) | Nil | Below the ₹2,000 threshold |
| ₹1,900 (grocery) | Nil | Below the threshold |
| ₹6,000 (electronics) | ₹24 | 0.4% applies if specified |
| ₹40,000 (furniture) | ₹160 | 0.4% applies if specified |
| ₹1,20,000 (jewellery) | ₹300 | Capped |
Run your own numbers in the charges calculator. For the threshold itself, see charges above ₹2,000.
What merchants should do
- Confirm your MCC and small-merchant eligibility in writing with your acquirer.
- Check whether your category is one of the specified categories with separate treatment.
- Record MDR as a business cost in your books — it is not a tax and not a tax deduction at source.
- Keep collections reconcilable — see business payments via UPI.
Sources and verification
Facts on this page are checked against official sources — NPCI, RBI, the Income Tax Department, the Ministry of Finance, PIB and the GST portal. See the full list on the official sources page, the fact-checking process, or report an issue through corrections. Last verified: 13 October 2026.
Related pages
This page is educational information, not professional tax, legal or financial advice. Rules can change — verify against the latest official notification or consult a qualified professional before acting.