Find out the full calculation of MDR charges for UPI payments ranging from ₹2,000, ₹3,000, and ₹50,000 to ₹75,000..

The details regarding the MDR (Merchant Discount Rate) for UPI payments—set to take effect on October 15—are now clear. The charge is calculated based on the payment amount. No MDR applies to transactions up to ₹2,000. For amounts above this, MDR is calculated at a rate of 0.40%. However, a maximum cap has been set for large payments.

The government has clarified that the customer will not bear the MDR cost; the merchant (shopkeeper) will pay it. This amount goes to the merchant's bank. Therefore, the MDR amount will not be deducted separately from the customer's account in addition to the payment amount.

MDR charges based on payment amount

Payment Amount    MDR Percentage    MDR Amount
₹2,000                  No MDR                     ₹0
₹3,000                   0.40%                      ₹12
₹50,000                 0.40%                     ₹200
Above  ₹75,000    Max ₹300                ₹300

How much MDR for a ₹3,000 payment?

Suppose you make a UPI payment of ₹3,000 at a shop. An MDR of 0.40% applies to this amount. 0.40% of ₹3,000 is ₹12. This means the merchant must pay ₹12 as MDR for this transaction.

Now, consider a payment of ₹50,000. 0.40% of this amount is ₹200. Thus, the merchant's MDR for a ₹50,000 UPI payment would be ₹200.

What happens above ₹75,000?

There is an important point here: a maximum cap on MDR has been set for large payments. For transactions of ₹75,000 and above, the MDR remains fixed at ₹300. Even if the payment amount increases beyond this, the MDR will not exceed ₹300.

Consider a payment of ₹1 lakh. 0.40% of ₹1 lakh is ₹400. However, the maximum cap of ₹300 applies in this case. Therefore, the merchant will have to pay an MDR of ₹300 instead of ₹400.

No MDR on payments of ₹2,000

The MDR on UPI payments up to ₹2,000 will be zero. This means the merchant will not have to pay any MDR for a payment of ₹2,000.

Beyond this, the MDR will be ₹12 for ₹3,000 and ₹200 for ₹50,000. However, for payments of ₹75,000 or more, the MDR will be capped at ₹300.

Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.