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There is no single cheapest way for every small business in India to accept payments. A direct UPI QR can avoid many online-gateway costs, but the Ministry of Finance’s 15 September 2026 announcement describes merchant UPI MDR for certain transactions. Online gateways and payment links may also charge a provider fee even when the underlying payment route has zero MDR. For cards and net banking, compare your own provider’s current offer and the full cost—not a generic headline rate.
What the current UPI fee rules say
The Ministry of Finance, in a Press Information Bureau release dated 15 September 2026, described these UPI MDR treatments:
- Person-to-person UPI remains free.
- Merchant payments up to ₹2,000 remain free of MDR.
- Eligible small merchants receiving up to ₹1 lakh per month through UPI QR under the P2PM category continue to have zero MDR on all transactions.
- Specified P2M transactions above ₹2,000 attract 0.4% MDR, capped at ₹300 per transaction for transactions of ₹75,000 and above.
- Transactions above ₹2,000 in listed essential sectors—including railways, telecom, insurance, fuel and agricultural inputs—have a stated flat MDR of ₹5.
- Listed capital-market transactions have a stated MDR of 0.02%, capped at ₹300.
These are the categories and terms described in the 15 September 2026 government announcement; check for subsequent official circulars or implementation details before relying on them. In particular, confirm your merchant category, QR classification and monthly UPI QR receipts rather than assuming every merchant or transaction receives the same treatment.
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How the four collection options differ
| Method | Best fit | Costs to check | Main trade-off |
|---|---|---|---|
| UPI merchant QR | In-person sales, especially where customers already use UPI | Your merchant category and QR classification; transaction amount; monthly QR receipts; any aggregator service fee | Convenient at the counter, but the customer must use UPI and the QR must be the merchant’s own correctly presented code. |
| Cards | Online checkout or in-person acceptance for customers who want debit, credit or card rewards | Acquirer or gateway rate by card type; taxes; terminal or service fees; refund and dispute costs; special card categories | Offers customers a credit or card option, but merchant pricing depends on the provider and contract. |
| Net banking | Online checkout for customers who prefer a bank-login or transfer flow | Gateway rate; supported banks; settlement and refund terms | An alternative to cards and UPI online, though the flow depends on the customer’s bank and gateway integration. |
| Payment link | Remote orders, invoices and sales through messaging or email, including businesses without a full website checkout | Provider fee for the underlying payment method; GST; settlement; refund and dispute terms; feature limits | Easy to share and can offer multiple payment methods, but the customer still has to complete the provider’s checkout. |
Why zero MDR may not mean zero online payment cost
MDR is not the only possible charge in a payment flow. A gateway can charge its own platform or technology fee, and the total can also depend on GST, settlement choices and other service terms. Razorpay’s pricing page, accessed 4 October 2026, lists a standard 2% transaction fee plus applicable GST across cards, UPI, wallets and net banking, with no setup fee or annual maintenance charge in that stated standard plan. It separately explains that standard bank-to-bank UPI and RuPay debit have zero MDR while its gateway platform or technology fee still applies. These are Razorpay’s published terms, not an industry-wide tariff; merchant-specific or promotional pricing may differ.
Razorpay says settlement is typically T+1 or instant and that optional services such as instant settlement have separate pricing. Check the provider’s current contract for your own settlement schedule and any added charge. A direct QR payment and a UPI payment accepted through a gateway are therefore not automatically the same cost proposition.
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- Accept all major credit and debit cards and pay one low rate with no hidden fees and no long-term contracts.
- Process chip cards in just two seconds.
- Get your money as soon as the next business day.
- Use it cordlessly with the built-in battery, designed to last all day.
Payment links are a workflow, not a separate payment rail
A payment link lets you send a request to a remote customer—such as by WhatsApp, email or SMS—without requiring a conventional website checkout. The customer then pays through one of the methods the provider supports. Razorpay describes its links as shareable through those channels and says its payment collection suite supports cards, net banking, UPI and wallets. See Razorpay’s payment-link information for that provider’s description; features and rates vary by provider and should be checked against current terms.
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Ask at least two providers or acceptance routes for comparable terms. Use your expected transaction mix and workflow, not just the advertised percentage.
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- Get your money as soon as the next business day.
- Get set up quickly with no long-term commitments. Download the Square Point of Sale app for free, create an account, and start taking payments anywhere.
- Run your business all in one place with the free Square Point of Sale app. Track your sales, manage inventory, accept tips, send receipts digitally, and more.
- Works with Apple devices with a Lightning connector.
- Total fee: Include the payment-method rate, GST, fixed charges and any terminal or service fees.
- Settlement: Check how quickly funds arrive and whether faster settlement costs extra.
- Coverage and customer friction: Confirm supported banks and payment types, and consider how easily customers can complete the flow.
- Refunds and disputes: Ask what happens to fees on refunds and what dispute or chargeback costs may apply.
- Reconciliation: Check how transactions appear in reports and whether the workflow fits your bookkeeping.
- Reliability evidence: Look for evidence relevant to your business; do not treat a provider’s own success-rate claim as an independent comparison.
- Workflow: A counter sale, an online checkout and a remote invoice may call for different collection options.
For a physical counter, a QR standee can display your existing merchant QR; it is only a display accessory, not a payment gateway, terminal or enrollment service. It is not needed for payment links, cards or net banking.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the older RBI guidance does—and does not—establish
An RBI report records that, from 1 January 2020, MDR was not to be collected on UPI and RuPay debit transactions, and that savings-account holders were not to be charged for online-initiated NEFT transfers. That is historical context, not a complete statement of the UPI position described in September 2026: the later government announcement sets out MDR for specified merchant transactions. See the RBI report for the earlier measures.
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- Use the free SumUp App on your smartphone or tablet to start accepting transactions
- Simply pay 2.6% +10 per in-person transaction
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- Pay one transparent rate per swipe for Visa, Mastercard, Discover and American Express.
- Works in conjunction with most downloadable Square point-of-sale apps on your device. Customers can pay, tip and sign directly on your device. Track payments in cash, gift cards and more. Also lets you send receipts via e-mail or text message, makes it easy to apply discounts, keeps a data and sales history log and more.
- Accepts magstripe credit card payments, including those from Visa, Mastercard, Discover and American Express (fees apply).
- App sends deposits to your bank account within 1 to 2 business days, or enjoy instant deposits (fees apply).
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
