If a merchant adds a fee for paying by card or UPI, save the bill and payment evidence, ask the merchant in writing to explain or refund the charge, and then complain to the relevant bank or payment provider. The rules depend on the payment method and the type of fee: RBI guidance specifically bars passing debit-card MDR to customers through covered payment aggregators and gateways, while the Government of India says UPI customers must not pay UPI MDR. The available official sources do not settle every credit-card surcharge or every separate convenience fee.
The most useful first question is not simply, “Is this a surcharge?” but, “What exactly is the charge, which payment method did I use, and was the fee shown before I paid?” Those details determine what you can accurately raise with the merchant, bank, or payment provider. This guide explains the distinctions, what evidence to keep, and how to escalate without describing an ordinary fee dispute as fraud.
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First identify what the charge is
A surcharge dispute is easier to assess when you distinguish the payment rail from the fee the merchant says it collected. MDR, or merchant discount rate, is a merchant-side payment-acceptance charge. It is not automatically an amount the customer owes. A separately named convenience fee or service fee is a different kind of charge; whether it is allowed depends on the applicable rules and whether it was disclosed before payment.
Start by comparing the amount on your receipt with the amount shown at checkout and in your payment record. Look for the exact description of the extra amount: it may be called a surcharge, convenience fee, service fee, handling fee, or something else. Do not assume the label settles the issue. Ask the merchant to identify its basis and whether it is a merchant-side MDR amount passed on to you or a separate fee. Keep the distinction in your complaint, because the cited RBI guidance is specific to debit-card MDR pass-through and separately addresses advance disclosure of other charges.
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| Payment method | What the cited official material establishes | What to do with an extra amount |
|---|---|---|
| Debit card | RBI payment aggregator and payment gateway guidance says covered entities must ensure merchants they onboard do not pass debit-card MDR to customers or separately charge customers in lieu of debit-card MDR. It separately says other charges, including convenience fees, should be displayed before payment. RBI payment aggregator and gateway guidance | Ask whether the amount is debit-card MDR or another fee, and whether it was displayed before you paid. |
| UPI | A Ministry of Finance statement dated September 15, 2026 says UPI customers will not pay MDR and that banks should ensure merchants do not pass it through. Ministry of Finance statement | Do not treat merchant-side UPI MDR as a customer charge. Request an explanation and refund if it was added to your bill. |
| Credit card | The cited material does not establish all current credit-card network rules, surcharge rules, or channel-specific requirements. | Do not assume the debit-card MDR rule resolves your credit-card case. Ask the merchant and your card issuer to identify the fee’s basis and applicable terms. |
RBI’s September 1, 2016 direction addresses unbundling MDR for debit, credit, and prepaid card categories; that should not be read as a complete ruling on every fee charged to a cardholder. RBI direction on unbundling MDR The evidence here does not settle every card network, merchant channel, or separate fee.
What the current UPI MDR figures mean—and do not mean
The Ministry of Finance’s September 15, 2026 release describes merchant-side MDR categories for specified transactions. It says P2P transfers and P2M payments up to ₹2,000 remain free, as do payments received by certain small merchants under the stated P2PM category. For specified larger merchant transactions, it reports a 0.4% rate, with a ₹300 cap for specified transactions of ₹75,000 and above. It also reports a flat ₹5 rate for specified essential-sector transactions above ₹2,000 and a 0.02% rate capped at ₹300 for specified capital-market payments. The release says approximately 96% of P2M transactions are unaffected by the described framework. Ministry of Finance, September 15, 2026
Those figures describe merchant-side categories in that dated government release, not a fee that can be added to a customer’s bill. The same release says UPI customers will not pay MDR and banks should ensure merchants do not pass it on. An earlier Ministry statement of August 8, 2026 also said consumers would not face UPI transaction charges, but the September release is later and gives the more specific framework. Ministry of Finance, August 8, 2026 Check current official rules before relying on a rate or category for a new transaction.
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The threshold and rates can be confusing because they describe how a merchant-side framework treats specified transactions; they are not a calculation for a customer to pay at checkout. For example, a reported 0.4% merchant-side rate for a specified payment above ₹2,000 does not mean that a merchant may add 0.4% to that customer’s bill as UPI MDR. Likewise, the reported ₹300 cap for specified transactions of ₹75,000 and above is a cap within the stated merchant category, not a customer surcharge limit. The release also reports a flat ₹5 rate for specified essential-sector transactions above ₹2,000 and a 0.02% rate capped at ₹300 for specified capital-market payments. Those categories do not change the release’s stated consumer position: UPI customers will not pay MDR.
The Ministry’s statement says roughly 96% of P2M transactions are unaffected by the described framework. Treat that as a figure about the framework in the September 15 release, not as a measure of how many merchants comply, how often customers face surcharges, or how likely a particular complaint is to succeed. No prevalence study of surcharge disputes is available here. Because the figures are tied to a dated government release and defined categories, check the latest official material if you are disputing a later transaction or need to determine how a particular merchant transaction is classified.
Gather evidence before contacting anyone
Keep a record that shows what was purchased, what you were charged, how you paid, and whether the fee appeared before payment. Save copies rather than relying on a merchant app or message that may later change. A clear evidence set lets the merchant or provider see the discrepancy without needing to infer what happened from a general allegation.
- Itemized bill, receipt, or invoice showing the extra amount.
- Order confirmation and the checkout page or screen, especially any fee disclosure visible before payment.
- Card statement or UPI transaction record, including the date, amount, merchant, and transaction reference.
- Any messages with the merchant, plus the dates and details of calls or in-person conversations.
If the charge appeared only at the point of payment, preserve the screen or receipt that shows when it was added. If it was shown earlier, keep that evidence too: the question of disclosure is relevant to other charges, even though disclosure alone does not establish that every fee is permitted. Note the purchase date, merchant name, base purchase amount if shown, total charged, fee amount, and the payment rail. If the merchant later explains the charge, save that response alongside the original receipt rather than replacing your first record with it.
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In complaints, describe the transaction reference and fee, but never share your full card credentials or UPI PIN. A surcharge complaint is not automatically a claim that a transaction was unauthorized. Share only the transaction details needed to identify the payment through the provider’s official complaint channel; do not put sensitive authentication information into a narrative or send it in response to an informal request.
How to dispute the charge
1. Ask the merchant to explain or refund it
Write to the merchant through a channel that preserves the message, such as email or the merchant’s official support form. Identify the purchase and the additional amount. Ask what the fee is called, what its basis is, whether it was disclosed before payment, and—if it was an undisclosed or incorrectly imposed payment-mode charge—request a refund. Keep the merchant’s response or note that no response arrived.
Make the request specific rather than accusing the merchant of breaking a rule before you know what it says the charge represents. For example, you can say: “My receipt for the purchase on [date] shows an additional [amount] for [fee description]. Please itemize the fee, explain whether it is MDR or another charge, and tell me where it was disclosed before payment. If this was a payment-mode charge imposed incorrectly or was not disclosed, please refund it.” Keep the brackets as prompts and replace them with your actual details.
If you spoke to someone in person or by phone, note the date and the substance of the conversation, then follow up in writing so there is a record. The merchant may provide an explanation or make a refund directly. A lack of response is also useful to record when you later contact the bank or provider, but this evidence does not itself guarantee a refund.
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If the merchant does not resolve the issue, use the official complaint channel for the bank, card issuer, or payment provider relevant to the transaction. Attach the bill, payment record, checkout evidence, and merchant correspondence. State the payment method precisely—debit card, credit card, or UPI—and ask for a complaint reference number. Explain why you believe the fee was wrongly imposed; avoid labeling a completed purchase as fraud unless the transaction itself was actually fraudulent, unidentified, or unauthorized.
For a debit-card complaint, identify whether the merchant or its response describes the charge as MDR or as another fee. You can point to the RBI payment aggregator and payment gateway guidance on merchants onboarded by covered entities and the prohibition on passing debit-card MDR to customers or separately charging in lieu of that MDR. If you believe it was a different convenience or service fee, say whether you saw it before paying and provide the checkout evidence. The guidance says other charges should be displayed before payment; it does not say that every disclosed fee is automatically allowed.
For a credit-card complaint, do not present the debit-card-specific rule as if it automatically decides the case. Ask the issuer to identify the applicable card or network terms for your transaction, and ask the merchant for the charge’s basis. The available official sources do not settle all credit-card-network surcharge rules or the requirements for every in-store or online channel. State what happened and ask the provider to assess it under the applicable terms rather than claiming a universal rule that the cited evidence does not establish.
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For a UPI complaint, state that the payment was an identified purchase and that the issue is the extra amount the merchant added. Ask the provider to assess the merchant’s fee against the stated consumer position on UPI MDR. Attach the receipt and payment reference so the provider can distinguish the merchant’s charge from the underlying UPI transaction.
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NPCI’s Register a Complaint service lets users register a complaint and check its status. NPCI says it makes complaints available to the relevant member institution, and the member bank or institution is responsible for resolution. NPCI directs complaints about fraudulent, unidentified, or unauthorized transactions to the customer’s bank. For an extra fee on an otherwise recognized purchase, describe it as a surcharge or fee dispute rather than an unauthorized transaction.
NPCI’s route is a way to register and follow the complaint; it should not be confused with NPCI itself promising a refund or determining every merchant-fee issue. The relevant member bank or institution remains responsible for resolving the complaint. Keep the NPCI complaint details and status with your other records, and continue to use the appropriate bank or provider complaint channel where needed.
4. Consider RBI Ombudsman escalation if the issue is eligible
For a complaint involving an RBI-regulated entity, the Reserve Bank–Integrated Ombudsman Scheme, 2026 generally requires that you first complain to that entity. RBI’s FAQ says you may approach the scheme if there is no reply within 30 days or the applicable longer timeline, or if you are dissatisfied with the response. The FAQ lists the CMS portal, email to [email protected], and physical submission to the Centralised Receipt and Processing Centre. Review the current FAQ and scheme for eligibility, coverage, time limits, and exclusions before filing. RBI Ombudsman Scheme, 2026 FAQs
The Ombudsman route is an escalation concerning an eligible RBI-regulated entity; it is not a general route to compel every merchant to refund a fee. First identify which entity you complained to and preserve that entity’s complaint reference, acknowledgment, and reply or evidence of no reply. Check the current RBI FAQ for whether that entity and your complaint fall within the scheme, and for the applicable time limit and any exclusions. Do not treat the 30-day period as permission to skip the initial complaint to the regulated entity.
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5. Keep a clear chronology
Save the dates of your purchase, merchant request, bank or provider complaint, acknowledgments, complaint references, responses, and any refund or reversal. A concise timeline makes it easier to show what happened if you escalate the case.
A simple record can list: purchase date and amount; date you noticed the fee; date you contacted the merchant; what the merchant said or whether it did not respond; the date and reference number of each provider complaint; and the date and outcome of each reply. Keep the original payment record even if a refund or reversal later appears, so you can show both the initial charge and the resolution.
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What to include in a written complaint
Keep the complaint factual and specific. You can adapt this structure:
- Purchase date, merchant name, amount, and transaction reference.
- Payment method: debit card, credit card, or UPI.
- The amount added and the name, if any, shown for the fee.
- Whether you saw the fee before completing payment, and what your receipt or checkout evidence shows.
- What you asked the merchant to do and the merchant’s response.
- The resolution you are seeking, such as an explanation or refund, and a request for a complaint reference.
For example, a concise complaint could read: “On [date], I paid [total] to [merchant] using [payment method], transaction reference [reference]. The receipt shows [fee name or description] of [amount] in addition to the purchase. I did/did not see this fee disclosed before payment. I asked the merchant for an itemized explanation on [date] and received [response/no response]. Please review whether the charge was correctly applied under the rules and terms relevant to this payment method, and advise whether it can be refunded. Please provide a complaint reference.” This format helps keep the issue focused without asserting facts you cannot support.
Attach readable copies of the relevant documents. You generally want the reviewer to be able to match the purchase, fee, payment and merchant response from the first page of your complaint. Avoid burying the key point in a long account of unrelated service problems; include only other details that explain the charge or the response you received.
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The correct path depends on both the rail and the nature of the fee. Use these scenarios as a checklist, not as a guarantee that a complaint will be decided a particular way.
- Debit card and a fee described as MDR: Ask the merchant to confirm the fee’s basis. If it is debit-card MDR or a separate charge in lieu of it, explain that RBI guidance says covered payment aggregators and gateways must ensure merchants they onboard do not pass it to customers. Complain to the relevant bank or provider if the merchant does not address it.
- Debit card and a separately named convenience fee: Preserve evidence of whether it appeared before you paid. RBI guidance separately says other charges, including convenience fees, should be displayed before payment. Raise nondisclosure with the merchant and provider, while avoiding the unsupported claim that every disclosed convenience fee is prohibited.
- UPI and a fee described as MDR: The September 15, 2026 government release says UPI customers will not pay MDR and banks should ensure merchants do not pass it on. Ask the merchant to itemize and refund the amount, then complain through the relevant provider and, where appropriate, NPCI’s complaint service.
- UPI and another type of fee: Do not assume the fee is MDR merely because it appeared after choosing UPI. Ask what it is and whether it was displayed before payment. The cited UPI statement settles the customer position on MDR, but the available material does not resolve every separate fee in every transaction.
- Credit card: Keep the same evidence and complain to the merchant and card issuer, but describe the matter as unresolved under the evidence here. The cited sources do not provide a complete current answer for every network, merchant, or online and in-store channel.
This comparison keeps three different questions separate: whether the charge is merchant-side MDR, whether another fee was disclosed before payment, and which entity can review the complaint. Naming the fee accurately is more useful than saying only that the merchant “charged extra for card payment” or “charged extra for UPI.” Those phrases describe what happened; your evidence and the merchant’s explanation establish what the charge may be.
Important limits before you escalate
- The debit-card prohibition described by RBI is specifically about passing debit-card MDR to customers through payment aggregators and gateways, including a separate charge in lieu of that MDR. It does not by itself answer every card surcharge question.
- The guidance distinguishes debit-card MDR pass-through from other charges, which should be shown before payment. That disclosure statement alone does not establish that every disclosed fee is permitted.
- The Ministry’s UPI MDR figures are merchant-side rates for categories described in its September 15, 2026 release. They do not authorize adding MDR to a customer’s bill.
- Whether a particular merchant, bank, or provider is covered by the RBI Ombudsman scheme depends on the entity and complaint. A refund is not guaranteed merely because a complaint is filed.
- The available official sources do not settle every credit-card-network surcharge rule or every difference between in-store and online transactions. Check the applicable current terms for a particular dispute rather than extending a debit-card statement to all credit cards.
- Complaint routes are not interchangeable. NPCI’s UPI complaint service routes complaints to relevant member institutions; the member bank or institution is responsible for resolution. RBI Ombudsman escalation is for eligible complaints involving regulated entities after the required initial complaint and response period or an unsatisfactory reply.
The central practical point is to preserve a complete record and state only what the evidence supports. A receipt with an extra amount is a reason to ask questions; it is not, by itself, proof of which fee was charged or which rule applies. If the merchant identifies the fee, compare that explanation with the relevant payment-method guidance and use the complaint route for the entity that can review it.
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Can a merchant charge extra for paying by debit card in India?
The RBI payment aggregator and gateway guidance says covered entities must ensure merchants they onboard do not pass debit-card MDR to customers or separately charge customers in lieu of debit-card MDR. It separately says other charges, including convenience fees, should be displayed before payment. That does not resolve every possible fee; ask the merchant to identify the charge and preserve evidence of what was disclosed.
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Can a merchant add UPI MDR to my bill?
The Ministry of Finance statement dated September 15, 2026 says UPI customers will not pay MDR and that banks should ensure merchants do not pass it on. The UPI MDR figures in that release describe merchant-side categories, not permission to add MDR to a customer’s bill. Ask for an itemization and complain to the relevant provider if needed.
What if the merchant calls the fee a convenience fee?
Ask for the fee’s basis and keep the checkout screen or other evidence showing whether it appeared before payment. RBI guidance says other charges, including convenience fees, should be displayed before payment, but that disclosure statement alone does not establish that every fee is permitted.
Do the debit-card rules automatically apply to credit cards?
No such conclusion follows from the cited material. RBI’s September 1, 2016 direction addresses unbundling MDR across debit, credit, and prepaid categories, but the available evidence does not settle all current credit-card network or channel-specific surcharge rules. Ask the merchant and card issuer to identify the applicable terms.
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Where do I complain about an extra charge on a UPI purchase?
Start with the merchant and the relevant bank or payment provider, using their official complaint channels and keeping the complaint reference. NPCI’s Register a Complaint service lets users register and check status; NPCI makes complaints available to the relevant member institution, which is responsible for resolution. NPCI says fraudulent, unidentified, or unauthorized transaction complaints should be raised with the customer’s bank.
When can I approach the RBI Ombudsman?
Under the RBI FAQ for the 2026 scheme, first complain to the relevant RBI-regulated entity. If there is no reply within 30 days or the applicable longer timeline, or you are dissatisfied with the response, an eligible customer may complain under the scheme. Check the current FAQ for coverage, exclusions, time limits and filing channels.
Will I definitely get a refund if I complain?
No. The evidence reviewed does not promise that every disputed surcharge will be refunded or that every merchant or provider falls within RBI Ombudsman jurisdiction. A clear record and a complaint to the right entity help explain the case, but do not guarantee an outcome.
The Bottom Line
Save the receipt, payment record and evidence of any fee disclosure; ask the merchant to itemize the charge; then complain to the relevant bank or payment provider. Be precise: the cited RBI guidance concerns debit-card MDR pass-through by merchants onboarded by covered aggregators and gateways, while the September 2026 government statement says UPI customers do not pay MDR. Credit-card and separate-fee questions are not fully resolved by these sources. For an eligible complaint involving an RBI-regulated entity, follow the 2026 Ombudsman process after first complaining to that entity.
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