MDR Calculator: Merchant Discount Rate [Free | upGrowth

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MDR CalculatorCalculate merchant discount rate fees

Transaction Amount (Rs)

Enter transaction amount

MDR Rate (%)

e.g. 1.8 for cards, 0 for UPI

Enter MDR rate

Monthly Transactions

-

MDR Fee per Transaction

-

Net Amount to Merchant

-

Monthly MDR Revenue

-

Annual MDR Revenue

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How to Use the MDR Calculator

Enter the Transaction Amount in Rupees.
Enter the MDR Rate as a percentage. Use 0 for UPI, 0.90 for debit cards above Rs 2000, 1.8 for standard credit card, or your negotiated rate.
Optionally enter Monthly Transaction Volume to see aggregated monthly and annual MDR revenue (useful for payment platforms modeling their revenue).

Tip: If you are a merchant comparing payment gateways, calculate the total annual MDR cost at your expected volume to make the right choice. Even 0.2% difference at Rs 1 Cr monthly volume is Rs 2.4 lakh annually.

MDR Formula

MDR Fee = Transaction Amount x (MDR Rate / 100)

Net Amount to Merchant = Transaction Amount – MDR Fee

Example: Credit card payment of Rs 10,000 at 1.8% MDR:

MDR Fee: Rs 10,000 x 1.8% = Rs 180
Net to Merchant: Rs 9,820
At 5,000 monthly transactions: Monthly MDR = Rs 9,00,000

MDR Rates Comparison: India 2026

By Payment Method:

UPI (Person to Merchant): 0% – Government subsidy covers bank costs
RuPay Debit Card: 0% for transactions up to Rs 2,000
Visa/Mastercard Debit (up to Rs 2,000): 0.40% maximum
Visa/Mastercard Debit (above Rs 2,000): 0.90% maximum
Domestic Credit Card: 1.5-2.0%
Premium/Corporate Credit Card: 2.0-2.5%
International Credit Card: 2.5-3.5%
Wallets (Paytm, PhonePe): 0.5-1.5%
Net Banking: Rs 10-25 flat fee per transaction
EMI on Credit Card: 1.5-2.0% + subvention sharing

By Payment Gateway (Standard Rates):

Razorpay: 2% for most payment methods, 0% UPI
Cashfree: 1.90% credit card, 0% UPI
PayU: 1.95% credit card, 0% UPI
CCAvenue: 2% + Rs 3 per transaction
Stripe India: 2% + GST

Note: Rates are indicative and subject to negotiation based on volume. High-volume merchants can get 0.3-0.5% below listed rates.

MDR Impact on Business Profitability

For businesses with thin margins (grocery, fuel, FMCG), MDR can significantly impact profitability. Here is the annual MDR cost at different volumes:

Rs 10L monthly volume at 1.8% MDR: Rs 2.16L annual MDR cost
Rs 50L monthly volume at 1.8% MDR: Rs 10.8L annual MDR cost
Rs 1 Cr monthly volume at 1.8% MDR: Rs 21.6L annual MDR cost
Rs 5 Cr monthly volume at 1.5% MDR (negotiated): Rs 90L annual MDR cost

This is why high-volume merchants aggressively negotiate MDR rates and push UPI adoption (zero MDR) wherever possible.

Watch how to calculate your payment processing fees instantly with MDR

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FAQs

FAQs about MDR Calculator

What is MDR?

MDR (Merchant Discount Rate) is the fee charged to merchants for processing electronic payments. It is deducted from the transaction amount before settlement. For a Rs 10,000 payment at 1.8% MDR, the merchant receives Rs 9,820. MDR is split between the acquiring bank, issuing bank, and card network.

Is MDR applicable on UPI transactions?

No. The Indian government mandated zero MDR on UPI and RuPay debit card transactions from January 2020. Banks are compensated through a government subsidy. This is a uniquely Indian policy that has driven massive UPI adoption but has also created profitability challenges for payment companies.

What are current MDR rates in India for different payment methods?

UPI: 0% (zero MDR). Debit cards up to Rs 2,000: 0.40%. Debit cards above Rs 2,000: 0.90%. Credit cards: 1.5-2.5%. International cards: 2-3.5%. Wallets: 0.5-1.5%. Net banking: Rs 10-25 flat fee. These rates vary by processor and merchant volume.

Who pays MDR - the merchant or the customer?

The merchant pays MDR. It is deducted from the settlement amount. In India, RBI prohibits merchants from passing MDR costs to customers as a surcharge on card payments. However, some merchants offer discounts for UPI/cash to effectively share the cost savings with customers.

How is MDR distributed among payment ecosystem players?

For card payments, MDR typically splits: interchange fee (goes to issuing bank, 1.0-1.6%), network fee (goes to Visa/Mastercard/RuPay, 0.1-0.2%), and acquirer margin (goes to payment processor/acquirer, 0.2-0.5%). The exact split varies by card type, transaction size, and merchant category code.

How do payment fintechs make money with zero MDR on UPI?

Payment companies like Razorpay, PhonePe, and Paytm use multiple strategies: charge convenience fees on certain transaction types, earn on payment page and subscription management tools, cross-sell lending and insurance products, monetize transaction data for credit scoring, and charge for value-added features like instant settlements.

Can merchants negotiate lower MDR rates?

Yes. MDR is negotiable based on: monthly transaction volume (higher volume = lower rates), average ticket size, business category, chargeback history, and relationship with the payment processor. High-volume merchants can negotiate rates 0.3-0.5% below standard. Switching between Razorpay, Cashfree, and PayU also creates competitive pressure.

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