Who bears the cost - the shopkeeper or the customer?
The merchant. MDR comes out of what reaches the merchant. The customer pays exactly what they intended and is charged nothing extra. On payments above ₹2,000 the merchant bears 0.4%.
Questions and answers
Every answer carries the question number from the official FAQ.
Can I add this charge to my customer’s bill?
No. A merchant may not recover MDR from the customer - not on the bill, not as a separate surcharge, not with a sign saying "0.4% extra on UPI", and not by asking for a larger amount. It is expressly prohibited.
What counts as a small merchant?
A merchant receiving up to ₹1,00,000 a month over UPI QR straight into a personal (savings) account is categorised P2PM, and their MDR is zero - mandatorily, not as an option. The category follows your account, not the size of the payment, so a P2PM merchant pays nothing even on a transaction above ₹2,000.
How does the ₹300 cap work?
MDR on any single transaction can never exceed ₹300. 0.4% of ₹75,000 is exactly ₹300, so the fee reaches the ceiling at ₹75,000 and stops growing. It is ₹300 on ₹1,00,000 and still ₹300 on ₹10,00,000.
Why is UPI AutoPay exempt?
Recurring mandates - utility bills, OTT subscriptions, SIPs and similar standing instructions - attract no MDR. These are pre-authorised, repeating collections, and the FAQ keeps them outside the charge. The exemption holds whatever the amount.
Do I need to change my QR code?
No. There is no QR code to change, no soundbox to replace and no re-registration to do. Your bank or PSP categorises you automatically. If anyone offers you a new QR, or asks for money for one, check with your bank first.
What about payments of ₹2,000 or less?
Nothing. MDR applies only above ₹2,000. At exactly ₹2,000 it is zero - the rule says "above ₹2,000", not "₹2,000 and above". Most payments at a small shop fall in this range.
Above ₹2,000, is the fee on the whole amount?
Yes, on the whole amount. ₹2,000 is a threshold, not a deduction. On a ₹5,000 payment the fee is 0.4% of ₹5,000 - that is ₹20 - not 0.4% of ₹3,000.
Why do some sectors pay a flat ₹5, and where is the full list?
Sectors such as Railways, Telecom, Insurance, Fuel, Utility bills (electricity, water, piped gas) pay a flat ₹5 per transaction instead of 0.4%, and only above ₹2,000. The FAQ names those and then says "among others", so the complete list has not been published. We do not guess: if you are not sure whether your sector is on it, choose the "not sure" option in the calculator and we show you both outcomes.
FAQ question FAQ Q33Not confirmed yet
When does this start?
From 15 October 2026. No MDR is due on any transaction dated before it. If your settlement report spans the changeover, the settlement check separates the pre- and post-cutover rows for you.
Is GST charged on top of the MDR?
The FAQ does not address tax, so this site does not add GST - every figure here is MDR alone. In practice many PSPs add 18% GST on top of the fee. The settlement check spots that pattern and tells you, so you do not mistake it for an overcharge. Confirm the treatment with your CA.
Not confirmed yet
What if my PSP deducts more than the rules allow?
Put your monthly settlement report through the settlement check. It recalculates every row and shows you exactly which ones were overcharged and by how much in total. The PDF it produces can go straight to your PSP or your CA. DFS has said charges will be monitored daily from the effective date - so keep your statements.
Is my file uploaded anywhere?
No. The entire reconciliation runs inside your own browser. The file never reaches a server, is never stored, and we never see it. The tool works with your internet switched off.