UPI charges for businesses

UPI charges: questions people ask

Are there charges on UPI payments to a business?

The announced UPI merchant fee (MDR) isn’t charged yet: NPCI has deferred it and no start date has been notified. Today, UPI payments into a business bank account carry a fee of 0%. The latest official notice is from NPCI, dated 15 Oct 2026. Payment gateways charge their own published fee for UPI, from 0.5% + 18% GST (Zoho Payments) to 2% + ₹3 + 18% GST (Instamojo). Last checked 26 Oct 2026.

When will UPI charges start?

The announced UPI merchant fee (MDR) isn’t charged yet: NPCI has deferred it and no start date has been notified. Today, UPI payments into a business bank account carry a fee of 0%. The latest official notice is from NPCI, dated 15 Oct 2026. NPCI reissued its FAQ on the UPI merchant fee (MDR). The only change is the start date: instead of 15 Oct 2026 it now says the fee starts immediately after Diwali, on a date to be notified separately. Rates and exemptions are unchanged. Clarifee updates this page and its calculator when NPCI announces a date. Last checked 26 Oct 2026.

Will I be charged for UPI payments above ₹2,000?

Not yet. Once it starts, the announced rule is: 0.4% MDR on the full transaction amount for P2M UPI above ₹2,000 (e.g. ₹3,000 → ₹12), capped at ₹300 per transaction (reached at ₹75,000). Paid by the merchant to its acquirer; may not be passed on to customers. Payments up to ₹2,000 stay free.

Who pays the UPI MDR, the customer or the business?

The business pays it to its bank. Merchants cannot pass MDR on to customers. UPI app providers are prohibited from imposing platform fees or hidden charges on users. (Status: deferred, with the rest of the announced rules.)

Do small merchants have to pay UPI charges?

Zero MDR on all P2PM transactions. A merchant with inward UPI credit above ₹1 lakh per month for 3 consecutive months moves to the P2M category. GST registration is not required for P2PM.

Is there GST on UPI payments?

The government said there’s no proposal to put GST on UPI payments above ₹2,000. GST applies to charges such as MDR, and with no MDR on UPI at the time, no GST applied. The Ministry of Finance (PIB, 18 Apr 2025) confirms “GST is levied on charges, such as the Merchant Discount Rate (MDR)”. No UPI-specific rate or exemption has been notified, and the ₹2,000 card exemption does not cover UPI by its wording, so 18% applies by default.

Is UPI free on payment gateways like Razorpay and Cashfree?

No. Even though bank-account UPI carries no MDR, payment gateways charge their own fee for UPI payments: Zoho Payments 0.5% + 18% GST; Cashfree Payments 1.95% + 18% GST; Paytm Payment Gateway 1.99% + 18% GST; PhonePe Payment Gateway from 1.99% + 18% GST; CCAvenue 2% + 18% GST. Some offer 0% to new sign-ups for a limited time; see each app’s page.

Which payment gateway is cheapest for UPI payments from a bank account?

Of the 7 payment gateways that publish a rate for UPI payments from a bank account, Zoho Payments leaves you the most from a ₹10,000 payment: ₹9,941.00 (0.5% + 18% GST). Instamojo leaves you the least: ₹9,760.46 (2% + ₹3 + 18% GST). 2 more don’t publish a rate. This uses each gateway’s published rate, before any sign-up offer; a rate you negotiate can be lower.

How much do payment gateways charge for UPI payments from a bank account?

Published fees run from 0.5% + 18% GST (Zoho Payments) to 2% + ₹3 + 18% GST (Instamojo). The most common is 2% + 18% GST, published by 2 gateways. On a ₹10,000 UPI payment, that leaves you between ₹9,760.46 and ₹9,941.00.