Last reviewed: 19 Oct 2026 — Answers on the deferred MDR rollout and the ₹2,000 PPI interchange rule rewritten.

UPI MDR Calculator

Reviewed: 19 Oct 2026

Fee estimate for India. Check your acquiring bank or payment provider’s merchant agreement.

Proposed NPCI change deferred (no new date yet)

As of 19 October 2026, the announced MDR rollout on select P2M UPI payments has been deferred until after Diwali, with the implementation date to be notified separately. See Akashvani’s 13 October report and the implementation-date report. The calculator below estimates a percentage fee on an entered payment mix; it does not implement the deferred framework’s category rules or caps.

Total Monthly UPI Volume

₹

Gross value of UPI merchant transactions processed monthly

Average Ticket Size

₹

Model assumption: an average ticket of ₹2,000 or less sets the estimated fee to zero; see limitations below

Chargeable Share (PPI / RuPay Credit %)

MDR / Interchange Fee Rate

Use your provider’s applicable merchant fee; 1.1% is an illustrative input

GST on MDR Fee

GST rate on the provider’s fee invoice; 18% is the example input

Results

Net Monthly Settlement

₹4,98,702

Total Fee Deductions₹1,298

Base MDR Fee₹1,100

GST (18% on MDR)₹198

Effective Processing Cost0.260%

India estimate in INR. Actual settlement depends on transaction-level charges and your provider’s agreement.

For information only. Not tax advice. Verify with a Chartered Accountant before filing.

A UPI MDR calculator estimates merchant fees by applying your provider’s rate to the chargeable part of your UPI collections. It then adds GST on that fee and subtracts both amounts to estimate net settlement. Use the applicable rate and payment mix from your merchant statement; the result is a planning estimate.

UPI MDR formula: fee, GST and net settlement

Let V be monthly collections, s the chargeable percentage, m the fee percentage and g the GST percentage. This calculator uses the following model when the average ticket exceeds ₹2,000:

Chargeable volume = V × s / 100

Merchant fee = Chargeable volume × m / 100

GST on fee = Merchant fee × g / 100

Net settlement = V − Merchant fee − GST on fee

At an average ticket of ₹2,000 or less, the existing model sets chargeable volume to zero. This shortcut cannot identify individual payments above the threshold or distinguish all RuPay credit, PPI and merchant-category rules. It excludes fixed platform subscriptions, refunds and other adjustments.

Worked example: monthly merchant collections

Suppose monthly collections are ₹5,00,000, the average ticket is ₹2,500, and 20% of collections attracts an assumed 1.1% fee. Using 18% GST on that fee gives the following estimate. These are illustrative inputs, not a tariff promised by NPCI or a provider.

Illustration using the calculator’s default inputs; amounts rounded to whole rupees
Item	Amount
Monthly UPI collections	₹5,00,000
Chargeable volume	₹1,00,000
Volume outside the assumed fee	₹4,00,000
Merchant fee	₹1,100
GST on the fee	₹198
Total deductions	₹1,298
Estimated settlement	₹4,98,702

The effective deduction is 0.260% of monthly collections. GST is applied to the fee amount, not to the entire sale: Razorpay explains this treatment for its platform fees.

Bank UPI, wallet interchange and gateway fees

Different charges can appear on the same merchant statement
Payment or charge	What to check
Bank-account UPI	NPCI’s guidance says normal bank-to-bank UPI is free; the 2026 P2M rollout is deferred.
PPI wallet / RuPay credit on UPI	Check instrument, merchant category and provider terms separately. A single percentage is only an estimate.
Gateway, QR or POS service	Platform, device and subscription costs depend on the contract and are not all included here.

Sources: NPCI’s bank-account and PPI clarification (29 March 2023); Akashvani’s deferred-rollout report (13 October 2026); Razorpay’s separate platform-fee explanation.

To compare a POS terminal with a QR service, add any device rental or subscription from each quote to its transaction fees. There is no single verified POS percentage that represents every merchant.

Frequently asked questions

What is MDR in UPI?

MDR is a merchant payment-acceptance fee. Interchange is a payment between participants in the payment system; it is not automatically the same as the fee shown on a merchant invoice. Use the fee your bank or payment provider actually quotes.

Is normal bank-account UPI free?

NPCI’s bank-account UPI guidance distinguishes normal transfers from PPI wallet merchant transactions. The announced 2026 MDR rollout for select P2M payments was deferred until after Diwali. A payment gateway may still charge a separate platform fee; check its pricing and your agreement.

Do customers pay UPI MDR?

NPCI’s PPI guidance says the interchange charge is not charged to customers. MDR is a merchant-side fee. Do not interpret the calculator’s deductions as an extra amount the customer must pay.

How is GST calculated on a payment-processing fee?

Apply the GST percentage to the processing fee. The example uses 18%, consistent with Razorpay’s published explanation of GST on platform fees. Confirm the tax treatment on your own provider’s invoice.

When will the new UPI MDR charges start?

The 13 October 2026 announcement deferred the rollout until after Diwali. The reports checked for this review say the new implementation date will be notified separately. The proposed rate is not applied automatically by this calculator.

Does the ₹2,000 threshold apply to my whole month?

This model uses the average ticket size as a shortcut: at ₹2,000 or below it sets the chargeable volume to zero. A mixed month can still contain larger individual transactions. Reconcile transaction by transaction and check PPI, RuPay credit and merchant-category terms separately.

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Regulatory baseline, assumptions & legal safety

Operational boundaries and statutory provenance governing this calculation model.

Verified 2026-09-24

Key Operational Assumptions

Bank account-to-bank account peer-to-peer (P2P) and peer-to-merchant (P2M) UPI transactions incur 0% MDR per Ministry of Finance mandate.
Interchange fee of up to 1.1% applies strictly on commercial merchant payments executed via Prepaid Payment Instruments (PPI wallets) on UPI exceeding ₹2,000.
A statutory GST rate of 18% is levied on merchant interchange and MDR processing charges.
Proposed 0.4% standard MDR on P2M transactions above ₹2,000 (capped at ₹300) was deferred by NPCI on 13 October 2026; no new effective date has been notified and it is not applied.

Authoritative Source & Regulatory Baseline

Authoritative Source: NPCI Circular on Interchange Fee on UPI PPI Merchant Transactions(National Payments Corporation of India (NPCI))
Governing Framework: Payment and Settlement Systems Act, 2007 / NPCI Circulars
Applicable Period: Current (FY 2023-24 onward)
Jurisdiction & Verification: Republic of India • Verified 2026-09-24

Statutory context: Per NPCI circular, an interchange fee up to 1.1% applies on merchant transactions conducted via Prepaid Payment Instruments (PPI wallets) on UPI for transaction values exceeding ₹2,000. Standard bank account-to-bank account UPI transactions remain at 0% MDR. Note: a revised P2M framework (0.4% MDR above ₹2,000 capped at ₹300, flat ₹5 on essential utilities/fuel, 0% for small merchants up to ₹1L/month) was proposed for 15 October 2026; NPCI deferred it on 13 October 2026 to after Diwali with no new date notified, so it is not applied. GST on interchange/MDR is 18%.

Model Scope & Specific Limitations

This calculator does not model the following scenarios or provisions:

Merchant acquiring banks and aggregators may negotiate custom pricing tiers based on Merchant Category Codes (MCC) and monthly volume commitments.
Does not calculate RuPay credit card-on-UPI interchange fee structures or specific fuel/education surcharge concessions.
Regular consumer-facing UPI payments from savings bank accounts remain 100% free with zero MDR deduction.
Estimated calculations for business planning; verify actual net bank settlement rates on your payment gateway dashboard.

Educational & Legal Disclaimer

This calculator uses the rules and published rates by National Payments Corporation of India (NPCI) for Current (FY 2023-24 onward). Estimated result based on the inputs and assumptions provided.

This calculator uses guidelines published by National Payments Corporation of India (NPCI) for Current (FY 2023-24 onward). Estimated result based on the inputs and assumptions provided. Educational tool only; not financial or banking advice. Check your merchant acquiring agreement for your specific rates.

Estimated Net Settlement