Fees For Accepting Payment Through Credit Card UPI

What's new ? already annouced last year, trial period is now over.

Now small merchants accept payment upto Rs2000 is Free from RuPay credit card link UPI,

Accept payment above Rs2000 - 1.25% to 2% MDR charges applicable, depend on your merchant category.

Note - RuPay credit card link UPI is 100% free for customers and no extra charges for next 1 trillion years but bank will charge you for fuel surcharge, rent payment etc, depend on your credit card issuer bank's t&c.

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@Abhishek012

I had activated GPay for Business and was transacting around 20-30k every month thru my HDFC Rupay card but it suddenly stopped working since last week of August; Had done last transaction of 4k on 14th August but now it is not going thru with error ' Couldn't allow this Payment, You can't use your card for this payment'

Any idea on how to activate CC payment since UPI thru Bank is going thru. It is a Business account (but linked to my personal Bank) with transaction of around 20-30k per month from various customers.

I can see the same settings in paytm and phonepe merchant apps which shows these charges clearly mentioned.

Just to clarify @abhishek012 if every time the customer pays 1999 rs per txn then there should be no mdr right? Or it on the total amount of payments received per month?

Old news.

@abhishek012

the big players have a lot of money to burn but other players in the market won't do the same.

Currently, the same MDR is charged by VISA & MasterCard but if you go to any nearby jewelry store and ask to pay by credit card they charge that fee from you (this is the case near me)

Once the charges are applicable on the rupay cc upi, I think it will become the same as VISA & MasterCard for the majority of big payments. Of course, there will be exceptions for big players like amazon, Flipkart, and soon but they are also not charging for VISA & Mastercard, so there is no such difference, just you will get the facility to pay via upi there, nothing else. 

But since small payments <2k are free, people may pay using multiple payments. This is beneficial.

Hamare jaise logo ke liye kya scheme hai.. na business karna hai na purchase karna hai.. bas rwd earn karna hai 🤔

Anyway.. 2% me kya hi hota hai agar sab genuine hai to.. Saman ka rate 2000 ki jagah 2040 ho jayega.. waise bhi hame kya oata kaun sa smana ka kitna genuine rate hota hai.. 20 bole waha bhi thik 24 bole wo bhi sahi..

20 me bhi 2 rs wargain larmege .. 24 me bhi 2 rs wargain..

Ab product ka koi spl list to nahi ki hame pata ho.. ye wala 20 ka aata hai to 22 kyo de raha.. 🤷

Bas dimag me hai.. business man ke.. 20% profit lena hai to 18 kyo le.. 22 % kar lo bhai.. technically customer will pay..ham to 200 ke bhi timatar kha chuke kya hi fark padega 20 ka 22 ho jaye to. 🤷🤦‍♂️

Bas ab dm me spl trick send kar do koi. Rupay cc 4 5 ho gaye ab inka kya kare ... I am neither businessman.. nor sad customer..  xd

I echo the sentiment that, currently, merchants are reluctant to bear the extra 2 to 3% MDR. However, looking ahead, they might have to adapt. Businesses within the UPI ecosystem find the merchant and payment gateway providers very enticing. Despite the current hesitancy to pay the extra 2% MDR, they might resort to forcing customers to pay in cash to avoid those fees upfront.

What sets UPI apart is its Indian origin, tailored for the Indian market. Unlike Visa and MasterCard, which are foreign entities, UPI is a homegrown product. The creators, well-versed in the Indian market, are unlikely to halt its progress just because merchants resist paying fees.

In the case of cards, you need to carry them separately in your wallet. However, with UPI, all you need is your phone. Everyone may forget their slippers, but hardly anyone forgets their phone; it's always with you, making UPI incredibly convenient.

Visa and MasterCard often overlooked small businesses, such as paan shops or fast-food sellers. UPI, in contrast, reached every nook and corner. While Visa and MasterCard limited themselves to cities, UPI penetrated even the smallest villages. It's everywhere, known to every individual, and is much more convenient than Visa or MasterCard.

Over the past 4 to 5 years, banks, mostly the sellers of POS machines, approached my business only twice. UPI QR makers, like Paytm Lite, Paytm, Amazon Pay, etc., have been remarkably aggressive. This suggests a high likelihood that UPI's merchant payment acceptance will witness a significant increase.

Notably, three to four years ago, many were hesitant to accept digital payments, fearing the involvement of third parties or potential taxation issues. The UPI ecosystem, however, compelled them to start accepting digital payments to avoid losing customers.

In my area, there's a significant shop that still doesn't accept UPI payments. However, as soon as you leave the shop, the shopkeeper calls you back, takes out his phone, and shows his personal UPI QR code for payment. This illustrates the power of the UPI ecosystem.

Comparing this to Visa or MasterCard, where people generally keep cards in their wallets along with some cash, UPI stands out. It doesn't require any physical wallet; your phone is enough. Particularly among the youth, many don't carry wallets all the time, especially in local areas where cash isn't a necessity.

While Visa and MasterCard may not approach small businesses, UPI's approach is free to be more extensive in India. One more crucial point is that, ultimately, it's the customer who will bear the extra charge. Businesses seldom accept losses, and what matters to a customer is not paying extra.

Considering the booming credit card industry in India, everyone may soon have a credit card. As dependence on credit cards increases, prices may rise. Even those paying with cash may have to bear a hidden MDR to the merchant. Customers may not be pleased, but globally, credit card usage has led to price hikes.

In the next 3 to 5 years, every single merchant, whether they like it or not, may be forced to accept payments through UPI or credit cards. Visa and MasterCard were never able to achieve this because they were not as aggressive. Additionally, the UPI government-backed system is more suitable for India.

RBI's initiative to reduce the circulation of physical cash is noteworthy. The news about RBI saving money on printing fewer notes indicates the gradual shift towards digital transactions. MasterCard's acknowledgment that surviving in India's UPI market is challenging adds another layer. In the coming years, allowing users to link their Visa and Master credit cards on the UPI network will limit merchants' options in India's market.

To make people addicted, so to speak, to UPI, it's vital to understand that people will be left with no other option but to accept it. In the future, payment gateway providers may incentivize businesses with front cash backs for all the charges they incur. However, after a few years, these cash backs might be removed, and businesses will have to bear the fees.

For instance, PhonePe or Paytm charges one percent or 2% of 2 rupees for recharges, and many people still use it. While some may be hesitant, the majority tends to dominate the market. In conclusion, UPI is far more convenient than MasterCard and Visa.