The Tool Desk
Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →For everyday payments in India, UPI is the clearest low-cost choice for individuals: person-to-person UPI transfers are free regardless of amount, and customers are not charged MDR on UPI merchant payments up to ₹2,000. IMPS and debit-card costs to you depend on your bank, account and card terms, so there is no universal winner for every transaction.
The key distinction is between a fee charged to the payer and a merchant discount rate (MDR) charged to a merchant for accepting a payment. A merchant-side rate is not automatically a fee owed by the customer.
Which payment method is cheapest for your transaction?
| Payment situation | What is established about cost | Practical takeaway |
|---|---|---|
| Sending money to another person with UPI | Free to send and receive, regardless of amount, under the Ministry of Finance statement dated 15 September 2026. Ministry of Finance, 15 September 2026. | UPI is the strongest supported zero-fee option for personal transfers. |
| Paying a merchant by UPI, up to ₹2,000 | Zero MDR; the Ministry says customers are not charged MDR. Ministry of Finance, 15 September 2026. | For a customer buying an everyday item, UPI is clearly free of MDR up to this amount. |
| Paying a merchant by UPI, above ₹2,000 | For specified regular P2M transactions, the announced MDR is 0.4%; at ₹75,000 and above it is capped at ₹300. This is a merchant-side charge, not a customer fee. Ministry of Finance, 15 September 2026. | Do not treat the MDR percentage as an amount the payer owes. The Ministry says banks should prevent merchants from passing it on to customers. |
| Sending money by IMPS | NPCI describes IMPS as an instant transfer service and sets a ₹5 lakh per-transaction limit for channels other than SMS and IVR. It directs customers to their bank for details; it does not state a universal customer fee. NPCI IMPS product overview. | Check your bank’s current IMPS tariff before comparing it with UPI. |
| Paying with a debit card | An Economic Times report of NPCI’s indicative merchant comparison gives debit-card merchant charges of up to 0.90%. That is not a universal cardholder transaction fee or annual card fee. The Economic Times, 22 September 2026. | For your own cost, check the card and account schedule of charges issued by your bank. |
Why UPI’s merchant rates are not your payment fee
MDR is a charge in the merchant payment-acceptance ecosystem. The Ministry of Finance’s 15 September 2026 release says: “MDR is a charge within the merchant payment ecosystem. It is not a charge on customers making UPI payments.” It also says merchants should not pass the charge on and that UPI apps may not add platform or hidden charges. These statements address customer charges; they do not make every payment method free of all possible bank-account or card fees.
UPI merchant categories have different announced MDR treatment
- Specified regular merchant payments above ₹2,000: 0.4% MDR, capped at ₹300 for transactions worth ₹75,000 or more.
- Essential and thin-margin categories above ₹2,000: a flat ₹5 MDR per transaction for railways, telecom, insurance, fuel and agricultural inputs, according to the release.
- Capital-market payments: 0.02% MDR, capped at ₹300, for mutual funds, securities, stockbrokers and dealers. This is not a normal retail-purchase rate.
- Qualifying small P2PM merchants: zero MDR on all transactions if they receive up to ₹1 lakh per month through UPI QR under the P2PM category. Not every merchant necessarily qualifies.
The Economic Times reported that this UPI MDR framework was scheduled to begin on 15 October 2026. Because that date is after the Ministry release’s date and the framework’s implementation status may change, treat the start date as scheduled rather than already in effect; check for a current official update if it affects a payment decision.
Do these 3 things before closing this tab:
1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errors#1 Best Overall
- Use the, easy-to-use, and customizable POS to get started.
- Accept contactless payments, chip cards, Apple Pay, and Google Pay from anywhere, with improved connectivity, extended battery life, and enhanced security. Pay one low rate for every tap or dip.
- No long-term commitments or contracts, no monthly fees- and with offline payments, keep taking payments for up to 24 hours.
- Safely and securely accepts payments anywhere. Plus, get data security, 24/7 fraud prevention, and payment-dispute management at no extra cost.
- Use the, easy-to-use, and customizable POS to get started.
What to check for IMPS and debit-card costs
IMPS: check the bank tariff for your account and channel
NPCI’s overview establishes the service and its ₹5 lakh per-transaction limit for channels other than SMS and IVR, but leaves fee details to the bank. Look up your bank’s current schedule of charges for IMPS and the channel you intend to use. The applicable cost cannot be ranked universally from NPCI’s overview alone.
Debit cards: separate merchant acceptance from what you pay
The reported “up to 0.90%” figure concerns a merchant’s debit-card acceptance cost, not a guaranteed charge to the person using the card. Your card’s issuance, annual or maintenance fees—and any transaction charge—are separate questions. Check the schedule for your particular bank and card variant rather than inferring your personal cost from an MDR comparison.
Quick Recap
Best Value
- Accept all major credit and debit cards and pay one low rate
- No hidden fees and no long-term contracts
- Mobile card reader that accepts payments anywhere & anytime
- Use the free SumUp App on your smartphone or tablet to start accepting transactions
- Simply pay 2.6% +10 per in-person transaction
Rank #4
- With Square Terminal, you can ring up sales, accept payments, and print receipts, all with one device. Use it at the counter or ring up customers anywhere in your store.
- 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.
Rank #3
- 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).
Rank #2
- 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.
A quick way to choose
- For a person-to-person transfer: UPI is the clearest supported free option under the Ministry of Finance statement dated 15 September 2026. If you choose IMPS, check your bank’s fee for the account and transfer channel.
- For a merchant purchase up to ₹2,000: UPI has zero MDR and the Ministry says the customer is not charged MDR. A debit card may also be convenient, but its customer-side costs depend on your bank and card terms.
- For a UPI merchant purchase above ₹2,000: identify the merchant category and distinguish the announced merchant MDR from any fee charged to you. The Ministry says MDR should not be passed on to customers.
- Before claiming debit card or IMPS is cheaper: compare the current schedules of charges for your own account and card. Merchant acceptance rates do not answer that customer-fee question.
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.
