Can a Shop Charge Extra for UPI? Merchant MDR Explained
MDR is a merchant-side payment charge. The Ministry of Finance says banks have been advised to ensure merchants do not pass MDR to customers. A merchant MDR estimate does not authorise an extra UPI charge.
The bill and the merchant fee are different
Example only: under the scheduled regular-P2M rules, a ₹5,000 bank-account UPI payment has ₹20 MDR before any applicable tax or other charges. That ₹20 is a merchant expense; it is not an instruction to collect ₹5,020 from the customer.
If you are asked to pay extra
Ask what the extra amount covers and request an itemised bill. Compare the bill total with the amount shown in your payment app. For questions about a payment fee, use your bank or payment provider's support channel and refer to the official announcement linked below.
If you collect payments at a shop
Check your provider's merchant agreement, category and invoices. Separate MDR from soundbox rent, software charges and tax before estimating costs.
This guide does not establish permission for cash discounts, fee-recovery pricing, minimum payment amounts or splitting transactions to avoid fees. Ask your provider about your specific situation rather than treating those tactics as approved alternatives.
What the calculator and counter do
The public calculator models merchant costs using selected assumptions. It does not alter a customer's bill. The counter creates a QR with a pre-filled amount; the merchant checks receipt on their existing soundbox or business app.
Estimate your merchant fee
Model one bill or your monthly bill mix with explicit category, date and tax assumptions.
Open fee calculatorCommon questions
Is MDR a government tax on the customer?
No. The Ministry of Finance describes MDR as a charge distributed within the merchant payment ecosystem, not a government or NPCI tax and not a customer charge.
Does every UPI payment above ₹2,000 have the same merchant fee?
No. The account category, sector and payment source matter. The scheduled bank-account UPI MDR should not be applied automatically to exempt accounts or credit-linked payments.
Does Dukaan QR automatically verify a payment?
No. The merchant checks their soundbox or business app and marks the payment received. A generated QR or customer screenshot is not automatic receipt confirmation.
Sources and review date
Reviewed against the DFS FAQ dated 15 September 2026 and the Ministry of Finance announcement on 3 October 2026. This page does not update automatically. Recheck policy and provider implementation after 15 October.
Create a UPI QR for your bill amount
Enter the final bill and show a QR with the amount pre-filled. Payment-app behaviour may vary. Check receipt on your existing soundbox or business app.
Open shop counter