How the ₹300 UPI MDR cap works, with examples at ₹5,000, ₹50,000 and ₹1 lakh

The short answer

How does the ₹300 cap on UPI MDR work?

MDR on a single UPI payment can never exceed ₹300 (FAQ Q32). A ₹5,000 payment costs ₹20, ₹50,000 costs ₹200, and anything from ₹75,000 up costs ₹300.

0.4% of ₹75,000 is exactly ₹300, which is why the cap starts there.

In this article

1. The cap in one line
2. Why ₹75,000?
3. At ₹5,000
4. At ₹50,000
5. At ₹1 lakh
6. The whole range in one table
7. ₹74,999 versus ₹75,000
8. Why flat ₹5 sectors are never capped
9. Capital-market payments have their own cap
10. What the cap means for your month
11. Why splitting a big payment costs more, not less
12. Two things the cap does not change
13. How to check the cap on your statement

For most shops, UPI MDR is a matter of a few rupees on the occasional larger bill. But for anyone who takes big payments - a furniture showroom, an electronics store, a jeweller, a wholesaler, a car-accessories dealer, a hospital - the most important number in the new rules is not 0.4%. It is ₹300. That is the most MDR that can ever be taken from a single UPI payment, however large it is.

This article shows how the cap works, where it starts, and exactly what payments of different sizes cost, with the arithmetic written out. The figures are produced by the same rules engine that runs our MDR calculator, and every rule carries its FAQ question number so you can check it in the official document.

The cap in one line

For payments of ₹75,000 and above, MDR is capped at ₹300 per payment FAQ question FAQ Q32. The FAQ gives its own example: a ₹1,00,000 payment does not attract the percentage-based ₹400; the fee stops at the fixed ceiling of ₹300.

The rule underneath is the ordinary one: 0.4% of the full amount on P2M payments above ₹2,000 FAQ question FAQ Q3, Q26. The cap simply puts a lid on it.

Why ₹75,000?

Because that is where 0.4% reaches ₹300. Work it out: 0.4% of ₹75,000 is ₹75,000 × 0.4 ÷ 100 = ₹300. Below ₹75,000, 0.4% is always less than ₹300, so the cap never needs to do anything. At ₹75,000 and above, 0.4% would be ₹300 or more, so the cap takes over.

That gives the fee a simple shape:

MDR at different amountsBar chart: ₹0 on ₹2,000, ₹20 on ₹5,000, ₹200 on ₹50,000, ₹300 on ₹75,000, ₹300 on ₹1,00,000. At ₹75,000 the fee reaches the ₹300 cap and stops growing - it is the same on ₹1,00,000.

Up to ₹2,000 the fee is zero. From just above ₹2,000 it climbs steadily at 0.4%. At ₹75,000 it hits ₹300 and goes flat.

At ₹5,000

A customer pays ₹5,000 for a pair of shoes.

One point people often get wrong: the ₹2,000 is a threshold, not an allowance. The fee is 0.4% of the whole ₹5,000, not of the ₹3,000 above ₹2,000 FAQ question FAQ Q26. The FAQ's own table confirms it: a ₹3,000 purchase costs ₹12, which is 0.4% of the full ₹3,000 FAQ question FAQ Q35.

At ₹50,000

A customer pays ₹50,000 for a refrigerator.

At ₹1 lakh

A customer pays ₹1,00,000 for a laptop and a printer.

And it keeps going. A ₹2,50,000 payment for a sofa set still costs ₹300. A ₹5,00,000 payment for a batch of wholesale stock still costs ₹300. As a share of the payment, the fee keeps falling the larger the payment gets: ₹300 on ₹5 lakh is 0.06%.

The whole range in one table

Read it from the top. ₹2,000 is free. ₹2,001 costs about ₹8, because the fee applies to all of it. The fee rises in step with the amount until ₹75,000, then stops.

₹74,999 versus ₹75,000

These two rows look identical, and it is worth knowing why. 0.4% of ₹74,999 is ₹299.996. Money is settled in paise, so that rounds to ₹300.00. At ₹75,000 the fee is ₹300 exactly.

So on paper the cap has not yet "bitten" at ₹74,999 - the fee is the percentage, rounded - but in practice the two cost the same. What you should never see is more than ₹300 on any single payment, whatever the amount FAQ question FAQ Q32.

Why flat ₹5 sectors are never capped

In some sectors, payments above ₹2,000 pay a flat ₹5 instead of 0.4%: railways, telecom, insurance and fuel FAQ question FAQ Q33, and electricity, water and piped-gas bills FAQ question FAQ Q41. There is no cap to apply, because ₹5 is already a fixed amount and always far below ₹300. An ₹80,000 fuel payment costs ₹5; so does a ₹3,000 one: ₹5. More on these sectors: Flat ₹5 sectors: fuel, telecom, insurance, railways, utilities - and what is still unconfirmed.

Capital-market payments have their own cap

UPI payments to mutual funds, stockbrokers, securities dealers and investment platforms follow a separate, lower rate: 0.02% of the amount, also with a maximum of ₹300 FAQ question FAQ Q37, Q38. At 0.02%, a payment would have to reach ₹15 lakh before that cap came into play. Our calculator is built for shops and service businesses and does not model this rate; if you run an investment business, check the figure with your PSP. Recurring SIPs through UPI AutoPay are a different case again - see Why AutoPay and SIP payments carry no UPI MDR.

What the cap means for your month

For a business that takes several large payments a month, the cap makes the cost predictable. You can work out your maximum exposure on the back of an envelope: the number of payments of ₹75,000 or more, times ₹300.

The same showroom's smaller sales - chargers, cables, extended warranties under ₹2,000 - cost nothing at all FAQ question FAQ Q26. For a full month with a realistic mix of payments, the monthly cost estimator does the arithmetic, and worked months for three kinds of shop are in How much will UPI MDR cost my business? Worked scenarios for a kirana, a restaurant and a pharmacy.

Why splitting a big payment costs more, not less

Because the cap applies per payment, a large payment taken in one go is the cheapest way to take it. Split it, and each part is charged separately.

The FAQ does not say anything about split payments either way, and we do not suggest structuring payments around the rules. The point is simply that, for large bills, one payment is never more expensive than several FAQ question FAQ Q32.

Two things the cap does not change

The customer still pays the listed price. However large the payment, the merchant cannot add the ₹300 to the customer's bill FAQ question FAQ Q34. The detail: Can a shopkeeper charge the 0.4% to customers? What the rules actually say.

Small merchants still pay nothing. If you are a P2PM merchant - UPI money over QR straight into a personal account, up to ₹1 lakh a month - you pay no MDR on any payment, large or small FAQ question FAQ Q23, Q24, Q26. See P2PM explained: the ₹1 lakh monthly exemption for small merchants.

How to check the cap on your statement

From 15 October 2026 FAQ question FAQ Q5, look down the fee column of your settlement report for any single payment with more than ₹300 deducted. That should never happen FAQ question FAQ Q32. Our settlement check flags it automatically, and How to read your UPI settlement statement and spot a wrong deduction shows how to spot it by eye.

For everything else in the new rules, the whole picture is in UPI charges from 15 October 2026: the complete guide for merchants.

Common questions

What is the most MDR that can be charged on one UPI payment?

₹300. For payments of ₹75,000 and above, MDR is capped at ₹300 per payment (FAQ Q32).

What is the UPI MDR on ₹1 lakh?

₹300. 0.4% would be ₹400, but the ₹300 cap applies from ₹75,000 (FAQ Q32).

What is the UPI MDR on ₹50,000?

₹200 - 0.4% of the full amount, below the cap (FAQ Q35).

Does the ₹300 cap apply in flat ₹5 sectors?

It never needs to. Those sectors pay a fixed ₹5 on payments above ₹2,000, whatever the amount (FAQ Q33, Q41).