UPI merchant services extend well beyond the merchant discount rate (MDR): providers can support QR acceptance, payment operations, settlement visibility, reconciliation and optional financial services such as lending or insurance. India’s September 15, 2026 MDR framework does not charge every merchant or customer; it sets fees for specified merchant transactions while retaining several zero-MDR categories.
What merchant services add beyond payment acceptance
A UPI merchant relationship begins with accepting a payment, but it can include the practical work around each transaction: onboarding a merchant, deploying a QR code, keeping payments reliable, showing settlement information, helping reconcile transactions and resolving problems. These services matter because merchants need to know not only that a customer paid, but also whether the payment succeeded and how it fits into their records.
NPCI’s UPI FAQ explains that scanning a merchant QR displays merchant information on the customer’s payment page. The scan may happen in a consumer-facing app, but the QR and the merchant information behind it are part of merchant acceptance.
Providers may also offer adjacent financial services, including lending or insurance, as a way to deepen merchant engagement and diversify the service model. These are category-level possibilities, not evidence that any particular company earns a specific share of revenue from them. Current company-by-company revenue mixes, margins and service prices are not established in the cited material.
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How India’s September 2026 MDR framework applies
The Ministry of Finance’s September 15, 2026 release describes the current framework. MDR is a merchant-ecosystem charge—not a customer fee, government tax or payment collected by the government or NPCI. The Ministry states: “MDR is neither a tax nor a charge collected by the Government or NPCI.” The framework distinguishes transaction types and merchant categories; it does not mean all UPI merchant payments carry MDR.
| Transaction or merchant category | September 15, 2026 treatment |
|---|---|
| Person-to-person (P2P) UPI transactions | Remain free of MDR. |
| Person-to-merchant (P2M) transactions up to ₹2,000 | Remain free of MDR. |
| Qualifying small merchants in the P2PM category, receiving up to ₹1 lakh per month through UPI QR | Zero MDR on all transactions. |
| Specified P2M transactions above ₹2,000 | 0.4% MDR; for transactions of ₹75,000 or more, the MDR is capped at ₹300 per transaction. |
| Transactions above ₹2,000 in specified essential and thin-margin sectors | Flat ₹5 MDR. |
| Specified capital-market transactions | 0.02% MDR, capped at ₹300. |
These categories and rates are those in the Ministry’s September 15, 2026 release. The Ministry estimates that approximately 96% of merchant transactions will remain unaffected; that is the government’s estimate, not an independently verified calculation in the cited sources.
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The policy context changed over time. An August 8, 2026 government statement described the legal change as enabling and said the applicable MDR decision would follow the relevant legislative and steering process. The September release supplies the detailed current categories and rates. The separate FY 2024–25 incentive scheme concerned qualifying low-value BHIM-UPI P2M transactions and ecosystem incentives; it is historical context, not the current MDR schedule.
What merchants should compare when choosing a provider
MDR is only one part of the merchant relationship. A useful comparison focuses on the operating tasks the provider helps a business complete, rather than assuming a single fee tells the whole story.
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- Onboarding and QR acceptance: Ask how the merchant is registered, how its QR is issued and what information customers see when they scan it.
- Reliability and declines: Understand how the provider handles failed or delayed payments and what support is available when a transaction’s status is unclear.
- Settlement visibility: Check how easily the merchant can see payment and settlement information and identify transactions that need follow-up.
- Reconciliation tools: Look for tools or reports that help match payment records with sales and accounting records.
- Support: Compare how merchants can get help with onboarding, QR acceptance, settlement questions and payment problems.
- Optional financial services: If lending or insurance is offered, evaluate the terms and suitability separately from payment acceptance.
There is no sourced head-to-head provider ranking or current price table here, so these are decision criteria—not claims that one named provider is best or that every provider offers each service.
QR codes, soundboxes and optional counter equipment
QR codes remain a central acceptance method, while soundboxes provide audible payment confirmation. PwC’s Indian Payments Handbook 2024–2029 says soundboxes are gaining traction alongside QR codes and describes voice confirmations as a way to streamline the merchant experience. A device is an optional tool, not a replacement for merchant onboarding or the payment service itself.
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- The Clover Compact and Clover Mini /Station sync with each other through the Clover Dashboard and cloud-based network. This allows you to manage transactions, track sales, and access business data across both devices seamlessly. Plug in, not battery/mobile. Requires New Processing account through Powering POS. (US, PR, USVI). CANNOT be used with a different Processor. Rate match guarantee. Contact us for questions
For context, PwC reported more than 352 million QR deployments and 8.9 million POS deployments in FY24, citing RBI and PwC analysis. It reported FY24 growth of 34% for QR deployments and 14% for POS deployments. These are historical FY24 figures, not current deployment counts.
A merchant considering a soundbox should confirm provider compatibility, connectivity, supported languages, battery needs and other device requirements before choosing one. A QR display holder can present an existing merchant QR at a counter, but it does not create a valid merchant QR, provide merchant onboarding or process payments.
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- With Square Handheld, you can accept payments, take tableside orders, or scan barcodes anywhere. With a slim design and comfortable grip, the POS is easy to carry in your palm or pocket. Square Handheld is designed to withstand water splashes and dust. Add an optional protective case for accidental drops. A long-lasting battery and offline payments let you keep selling.
- Slim, pocketable, and lightweight so you can accept payments wherever your customers are.
- Take tableside orders, bust lines, or use the built-in barcode scanner, all with one sleek device.
- A battery that can power through your shift and offline payments let you keep selling, even if your internet is down.
- Accept all major credit and debit cards and pay one simple rate with no hidden fees and no long-term contracts required.
What the available figures do—and do not—show
PwC’s FY24 deployment figures indicate the scale of QR and POS infrastructure in that reporting period. They do not establish current company-level merchant-services revenue, provider profitability or how much any named company earns from MDR compared with reconciliation, lending, insurance or other services. Those comparisons require company-specific disclosures that are not provided by the cited sources.
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