UPI Payment Rules: Nowadays, everyone uses UPI for payments; it has become the easiest way to make transactions. Whether you are making small or large payments—such as buying vegetables, purchasing groceries, or paying small business owners—you might be wondering if there are any extra charges for transactions up to ₹2,000.
To address this concern and raise awareness, an update has been shared on social media clarifying that there are no additional charges—known as MDR (Merchant Discount Rate)—for payments under ₹2,000. Furthermore, customers do not incur any extra fees for bank-to-bank transfers. Payments from individuals to merchants are valid up to ₹2,000.
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What is MDR?
MDR stands for ‘Merchant Discount Rate’. It is a fee charged to merchants for accepting digital payments. However, for eligible transactions up to ₹2,000, the MDR is zero, meaning the shopkeeper does not have to pay any MDR for these transactions.
Relief for UPI payments via RuPay Credit Cards
According to available information, if a customer links a RuPay credit card to UPI and makes a payment of up to ₹2,000, the MDR remains zero for eligible small merchant transactions. This means small shopkeepers do not face additional merchant fees.
Charges on standard UPI transactions
When using standard UPI—that is, transferring money directly from your bank account to a shopkeeper—no transaction charges are levied on the customer. For small business owners, these payments are entirely free of any charges.
What are the rules for UPI payments made via a wallet?
If you make a UPI payment using a digital wallet, the rules may differ. For eligible merchant payments of up to ₹2,000, the MDR (Merchant Discount Rate) is zero. However, for PPI (Prepaid Instrument) merchant transactions exceeding ₹2,000, an interchange charge may apply. This charge depends on the merchant’s category and the applicable regulations.