Can a Shop Add 0.4% UPI MDR on the Bill?

Published: 3 October 2026

A shop should not add a line that says “UPI MDR 0.4%” on your bill. From 15 October 2026 the fee, where it exists, comes out of the shop’s settlement. You pay the price on the sticker. Banks were told not to let merchants pass the charge to the customer. The Centre also said it would watch this.

Say the board says ₹3,000 and the cashier asks for ₹3,012 “because UPI is charging”. That extra ₹12 is the shop’s own surcharge (अतिरिक्त शुल्क). It is not the official customer fee. You can refuse it, pay cash or card, or note the bill. This site cannot complain to NPCI for you.

What the Shop Is Allowed to Do

• Pay the MDR from settlement on an eligible bill above ₹2,000.
• Change the sticker price for everyone, cash and UPI alike. That is a price, not a UPI line.
• Not print a UPI-only add-on and call it the government charge.

A restaurant that quietly lifts every menu price by a rupee or two is a pricing choice. A restaurant that adds 0.4% only when you open PhonePe is the thing the FAQ told shops not to do. A ₹2,000 bill has no MDR to pass on. A family transfer has none either.

If You Are the Shop

Do not print “UPI extra 0.4%”. If your margin on a large bill cannot take ₹12 on ₹3,000, look at the price you charge everyone. After 15 October, read one settlement. A fee line there is the MDR. A fee you typed on the invoice is your surcharge. They are not the same entry.

The rate table and calculator stay on the homepage.