Merchant & QR
What is MDR?
Merchant Discount Rate · मर्चेंट डिस्काउंट रेट
The percentage a payment provider deducts from each sale — zero for standard bank-to-bank UPI, applies to credit-card-on-UPI above ₹2,000.
MDR is the fee slice taken from a merchant on every card or digital transaction. Card networks and banks typically charge 1–3%, which quietly erodes margins on thin-margin retail.
Since January 2020, bank-to-bank UPI and RuPay debit carry zero MDR by government mandate — the structural reason Indian merchants push customers toward QR payments. RuPay credit card on UPI transactions above ₹2,000 are subject to interchange fees (typically 0.9–2% per NPCI circulars), but for ordinary bank-funded P2M UPI you keep 100% of the sale.
MDR: quick answers
So accepting UPI really costs me nothing?
Directly, yes for bank-to-bank UPI. RuPay credit card on UPI transactions above ₹2,000 may carry interchange — rare for kirana-level commerce. Indirect costs are hardware like soundboxes or optional subscription services — never a cut of the payment itself for standard UPI.
How much am I losing on card sales?
Run your monthly card volume through our savings calculator to see the annual difference versus UPI.
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