UPI MDR Rules: P2P transactions are completely free. For merchant (P2M) payments, a nominal 0.4% MDR applies only above Rs. 2,000, strictly capped at a maximum of Rs. 300 for high-value transactions (Rs. 75,000+).
Applicable MDR Fee
Rs. 12.00
Standard 0.4% MDR applied
| Transaction Type | Person-to-Merchant (P2M) |
| Transaction Amount | Rs. 5,000.00 |
| Applicable MDR Rate | 0.4% |
| MDR Capping Applied? | No (Under Rs. 75,000) |
| Net Settlement (Merchant Receives) | Rs. 4,988.00 |
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Ministry of Finance UPI Fee Structure
The Ministry of Finance has clarified Merchant Discount Rate (MDR) norms for UPI digital payments across India:
- P2P Transactions: Completely free of cost for all citizens, regardless of whether you send Rs. 10 or Rs. 1,00,000 to family and friends.
- Micro Merchant Waiver (≤ Rs. 2,000): Small shops, daily groceries, and retail payments up to Rs. 2,000 attract 0% MDR to promote micro-merchants.
- Large Value Merchant Tier (> Rs. 2,000): A nominal 0.4% MDR is charged on commercial merchant settlements above Rs. 2,000.
- Rs. 300 Upper Cap (≥ Rs. 75,000): For big-ticket commercial purchases (such as electronics, jewellery, or wholesale goods), the maximum total MDR deduction is capped at Rs. 300.
Quick Comparison Table
| Transaction Value | P2P (Friend/Family) | P2M (Merchant) MDR | Effective Fee |
|---|---|---|---|
| Up to Rs. 2,000 | Free (Rs. 0) | 0.0% (Waived) | Rs. 0 |
| Rs. 2,001 to Rs. 74,999 | Free (Rs. 0) | 0.4% | Rs. 8.00 to Rs. 299.99 |
| Rs. 75,000 and above | Free (Rs. 0) | Capped at Rs. 300 | Max Rs. 300 (Flat) |