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A UPI payment provider can reduce costs only if you compare the merchant’s full fee stack and actual settlement terms—not just a “0% UPI” headline. Separate any NPCI/acquirer MDR from the provider’s platform fee, add 18% GST to that fee, and price the settlement cycle your business needs. The September 2026 MDR schedule was reported as deferred pending a new effective date, so confirm in writing whether your acquirer is deducting it now. The best fit depends on your payment mix, offer eligibility, cash-flow needs and other services such as payouts or subscriptions.
At a glance
| Name | Best for | Key spec | Free plan / price | Checked |
|---|---|---|---|---|
| Cashfree | New UPI-heavy online merchants; payouts and split payments | Published standard fee 1.95%; instant settlement reported at 0.30% before GST | Reported 0% platform-fee offer up to ₹20 lakh GMV through 31 March 2027 for eligible new sign-ups | November 2026 |
| Razorpay | Mixed checkout, plugins and subscriptions | Published standard rate commonly reported as 2%; settlement listings conflict between T+1 and T+2 | Reported launch offers differ; confirm the offer email and post-offer rate | November 2026 |
| PhonePe | UPI-heavy merchants | Published price snapshots range from an undated free presentation to 1.99%; T+1 commonly reported | Get the free period and post-offer rate in writing | November 2026 |
| Paytm | UPI-focused merchants seeking a T+1 option | 1.99% in one published comparison; typical settlement T+1 | 1.99% in the cited snapshot; no promotion listed there | November 2026 |
| PayU | EMI, premium cards and larger businesses | About 2% for several domestic methods; EMI, Amex and international rates can be higher | UPI pricing is plan- and business-specific | November 2026 |
| Easebuzz | Merchants prioritising a T+0 option | T+1 reported as standard; T+0/instant option advertised | T+0 price not published in the cited comparison | November 2026 |
These are dated secondary-source price and settlement snapshots, not guaranteed offers. They can vary by merchant category, approval, volume, method mix and contract. A written, current quote is more useful than a comparison-page headline.
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What fees should I compare?
Compare four separate items: any NPCI/acquiring-bank MDR, the provider’s platform fee, GST on that platform fee, and any charge for faster settlement. A “free UPI” claim may refer only to the customer-facing payment or to the statutory MDR; it does not necessarily mean a gateway will process a merchant’s online payment for free.
MDR is the merchant discount rate payable by the merchant to its acquiring bank under the relevant framework. It is not a government tax or money automatically collected by NPCI. Platform fee is the aggregator’s charge for providing payment services. Research summaries of Indian gateway pricing consistently state that 18% GST applies to this fee. A provider may quote a blended rate, but you still need to know whether that rate includes or adds MDR.
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For example, a 2% platform fee plus 18% GST on that fee costs 2.36% of the transaction before any applicable MDR or acceleration charge. At a 1.95% fee, the comparable amount is 2.301%. On ₹1 lakh in eligible transactions, that is ₹2,360 versus ₹2,301, a difference of ₹59. Those examples exclude any separate MDR and assume the quoted rate applies to the entire amount. They are arithmetic illustrations, not an invoice or a promise that every transaction is eligible.
The distinction matters because UPI’s customer-facing rules and a merchant’s gateway bill answer different questions. Under the reported framework, the consumer pays nothing, and a merchant cannot pass MDR on to the customer. UPI apps are also not permitted to add a platform fee or other charge to the user for a UPI payment, according to NPCI’s position reported to the Supreme Court. That does not, by itself, prohibit a merchant-facing aggregator fee.
What does the September 2026 UPI MDR schedule say?
The framework announced on 15 September 2026 sets different merchant rates according to transaction type, amount and merchant category. It does not charge person-to-person transfers, and the reported schedule leaves everyday low-value merchant payments outside the standard 0.4% charge.
| Payment or merchant category | Reported MDR treatment under the 2026 framework |
|---|---|
| Person-to-person UPI, including transfers between a person’s own accounts | Free, with no monthly cap |
| Person-to-merchant UPI up to ₹2,000 | Zero MDR |
| Small P2PM merchant receiving up to ₹1 lakh a month via UPI QR | Zero MDR, including tickets above ₹2,000 |
| Specified P2M payments above ₹2,000 | 0.4%, capped at ₹300 on transactions of ₹75,000 or more |
| Named essential or thin-margin sectors above ₹2,000 | Flat ₹5 for railways, telecom, insurance, fuel and agricultural inputs; India Today also reports government utilities in this category |
| Mutual funds, securities, stockbrokers and dealers | 0.02%, capped at ₹300 |
The sector list and merchant classification matter: do not assume your business qualifies for the ₹5 rate because it sells something that seems essential. Match your merchant category code and business description against the acquirer’s written classification and the applicable NPCI circular. The ₹5 utility inclusion is specifically reported by India Today’s account of the announcement; verify the category against your acquirer.
For a standard 0.4% transaction, the cap changes the arithmetic on large tickets: 0.4% of ₹3,000 is ₹12; of ₹50,000, ₹200; and of ₹1 lakh, ₹400 before the cap, so the reported charge is limited to ₹300. The framework says the cap applies from ₹75,000. Business Standard’s explanation gives those example amounts and reports that more than 95% of P2M volume consists of transactions up to ₹2,000. Other reports describe roughly 96% of merchant transactions as unaffected and about 4% as attracting the charge; these are reported estimates, not a guarantee about an individual merchant’s mix.
Small QR merchants have a distinct exemption: a small P2PM merchant receiving up to ₹1 lakh monthly via UPI QR is reported to pay zero MDR even on a payment above ₹2,000. That monthly threshold concerns UPI QR receipts, not necessarily every payment accepted by a merchant through an online gateway. Confirm how your acquirer classifies both the merchant and the payment channel.
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The schedule’s announced start date was 15 October 2026, but later November summaries report that it was postponed pending a fresh date. As of 13 November 2026, no new effective date had been confirmed in the sources available for this article. Do not assume either that the 0.4% is already being deducted or that it has been cancelled: ask the acquiring bank or aggregator, in writing, whether it is collecting MDR on your category today and what event will trigger a change. The original date and framework are covered in Financial Express’s explainer; the later postponement appears in November secondary summaries and should not be treated as an NPCI status bulletin.
The schedule is also subject to a legal challenge. NPCI defended the framework in an affidavit, and ThePrint reported on 6 November that the Supreme Court had not stayed it. A refusal to stay a framework is not proof that collections have begun, nor does it decide the case. Merchants considering a long contract should ask how the commercial schedule would change if MDR is delayed, introduced during the term or altered through legal proceedings.
How do I compare providers using my own numbers?
Make a simple monthly cost sheet before requesting quotes. A provider’s lowest headline percentage is not necessarily the least expensive choice for your payment mix or cash-flow needs.
- Classify your business and payment channel. Note whether you are a small offline QR merchant, an online merchant, a marketplace or another business type. Ask which merchant category code and acquiring entity will appear on your approval.
- Record your payment mix. Estimate the shares of UPI, RuPay debit, other debit, domestic credit, corporate cards, international cards and EMI. Add monthly GMV, average ticket, the share of UPI tickets above ₹2,000 and your refund rate. A QR-led merchant and an electronics store with EMI sales should not compare only on the UPI rate.
- Separate statutory MDR from the platform charge. Put the applicable MDR on its own line and mark it contingent until your acquirer confirms collection and category. Ask whether the quote includes, excludes or passes it through. Avoid counting it twice if a blended quote already includes it.
- Add GST and promotions. Calculate 18% GST on the platform fee, then model the normal rate after any free period. Write down the offer’s eligibility rule, start date, cap, expiry and post-offer price. A “0%” offer without a confirmed end date and subsequent rate is not a usable long-term comparison.
- Compare settlement against your operating cycle. Get the approved standard T+ cycle and payout time, then ask for the fee and cutoff for same-day or instant settlement. If suppliers need payment the next morning, a cheaper T+2 offer can leave more cash tied up than a slightly higher T+1 rate.
- Ask about refunds and disputes. Confirm whether the platform fee and any MDR are returned when you refund a customer, whether partial refunds are treated differently, and how long funds can be held during a dispute. Public comparisons in this research do not provide a comparable refund-fee matrix, so get the answer in the contract or fee schedule.
- Request comparable success-rate data. Ask for authorisation or success rates by payment method and issuing bank for a merchant with a similar profile. A vendor’s broad “highest UPI conversion” claim does not establish performance on your customer and bank mix.
- Check the extra product you actually need. Marketplaces may value payouts and split settlement; subscription businesses may need recurring payments and UPI AutoPay; a durables seller may care more about EMI. Include payment links if relevant. Compare only services you need and their separate charges.
- Verify the contracting entity and get the complete schedule. Put the fee by method, GST, MDR treatment, category, promotion expiry, standard settlement time, instant fee, refund treatment and any setup or annual charge in writing. Confirm the legal entity on the contract, not just the brand name in an advertisement, and recheck the live terms at signing.
To estimate the cash-flow value of faster settlement, take the daily collections that would otherwise remain unsettled for the additional working day and compare that amount with the acceleration fee. The value depends on your own sales pattern, supplier terms and cost of funds; there is no single industry-average float figure established here. Buy instant settlement only for the slice of volume that genuinely needs it if the provider lets you choose.
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November 2026 comparison cards put several providers close to 1.95%–2% before GST, but those are secondary-source snapshots, not an authoritative tariff for every merchant. Skydo’s comparison dated 4 November gives an apples-to-apples illustration for ₹1 lakh of monthly sales at a ₹1,000 average ticket, with GST included and promotional offers excluded:
| Provider in Skydo’s snapshot | Published fee before GST | Illustrated amount including 18% GST |
|---|---|---|
| Cashfree | 1.95% | ₹2,301 |
| Paytm | 1.99% | ₹2,348 |
| PhonePe | 1.99% | ₹2,348 |
| Razorpay | 2% | ₹2,360 |
| PayU | 2% | ₹2,360 |
| CCAvenue | 2% | ₹2,360 |
Price illustration checked November 2026, based on Skydo’s dated comparison. The amounts exclude any separate MDR and assume the displayed fee applies to all sales in the example.
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On that snapshot, Cashfree’s standard fee is ₹59 lower than a 2% provider for ₹1 lakh of sales before considering differences in settlement, offer eligibility, payment method or refund treatment. That gap can be outweighed by an extra unsettled working day or by a different rate on international cards, EMI or other methods. It is not enough to declare one provider cheapest for every merchant.
Promotions can change the first months’ arithmetic, but their terms are not consistent across summaries. Cashfree is widely reported as offering a 0% platform fee for eligible new sign-ups through 31 March 2027, up to ₹20 lakh of GMV. A Billbazaar reading dated 20 August adds a condition of UPI representing at least 40% of monthly value and says volume above the cap is charged at 1.95%; because later summaries do not repeat that condition, ask for the live terms rather than assuming it applies or does not apply. Razorpay’s reported launch offer is described differently: Skydo says 0% for three months or ₹5 lakh of GMV, whichever comes first, while BigHelpers describes a 90-day offer. Do not combine those into one promise; use the written offer issued to your merchant account.
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International cards, corporate cards and EMI can move a merchant away from the cheap-UPI result. Billbazaar’s August reading reports Razorpay at 2% for several domestic methods, 2.15% for corporate cards and up to 3% for international cards; it reports Cashfree at 1.95% domestically and 2.99% on Visa/Mastercard international cards and 2.95% on Amex. PayU’s reported domestic rate is around 2% for several methods, with higher rates—one cited comparison says 3%—for Amex, Diners, EMI and international transactions. Treat these as dated comparison figures and request your own schedule. A high international or EMI share can matter more than a small difference in UPI rates.
Rates are negotiable for some merchants as volume grows, but do not assume a particular threshold: Unlimit says Razorpay’s custom-pricing conversation may open above about ₹5 lakh a month, while other providers’ thresholds are not established here. Ask each provider for its volume tiers, the methods each tier covers and whether the rate can change after onboarding.
How fast do providers settle, and what does faster settlement cost?
Published standard settlement cycles in 2026 comparisons run from T+1 to T+3 working days, but the sources disagree about the same provider. T+1 generally means the next working day; the contract must still specify the payout time, holidays, cutoffs, bank approval and any category restrictions.
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| Provider | Settlement reported in November 2026 comparisons | Faster-settlement price reported |
|---|---|---|
| Cashfree | T+2 in Skydo’s snapshot, with movement to T+1 by 8 p.m. during a current offer; other summaries describe different cycles | Instant at 0.30% excluding GST, reported by Skydo and Unlimit |
| Razorpay | T+2 in Skydo; T+1 in Unlimit | Instant available; price not published in Skydo’s snapshot |
| PhonePe | T+1 in Skydo and Unlimit | Faster option not published in Skydo’s snapshot |
| Paytm | Typically T+1 in Skydo and Unlimit | Same-day or early payout available in Skydo’s account; minimum fee not published |
| PayU | T+2 in Skydo; T+2 to T+3 in another comparison | No comparable published fee established here |
| Easebuzz | T+1 reported on all modes | T+0/instant advertised; price not published in Skydo’s snapshot |
| Instamojo | T+3 reported | Next-day payout reported at 0.25% plus 18% GST |
Settlement and acceleration figures checked November 2026; comparison articles differ. See Skydo and Unlimit.
For a ₹1 lakh batch, the reported 0.30% Cashfree instant fee is ₹300 before GST, or ₹354 after 18% GST, before any platform fee. That is an illustration of the reported rate, not a guaranteed invoice. Skydo says the prices for Easebuzz T+0, Razorpay instant settlement and Paytm same-day settlement were unpublished in its snapshot. If an acceleration fee is not stated in writing, you cannot compare it fairly.
Some comparisons also describe Cashfree as advertising settlement within 15 minutes, while others report the 0.30% price. Do not assume that the time promise and fee apply together under the same plan unless the provider confirms both. Your approved cycle can differ from a pricing page because of bank approval or merchant category; compare the approval email and contract, not only the public marketing claim.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Which provider fits a particular kind of merchant?
Use the provider shortlist as a starting point for quotes, not a permanent ranking. The best fit changes with your payment mix, required cash-flow timing, offer eligibility and the product that surrounds the payment.
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- New UPI-heavy online merchant under ₹20 lakh monthly GMV: Cashfree’s November comparison profile is notable for the lowest printed standard rate in Skydo’s set, a widely reported time-limited free offer, and a published 0.30% instant fee. Check the offer’s current eligibility and cap, and confirm the settled cycle in your approval.
- Mixed domestic checkout or subscription business: Razorpay is commonly listed at 2% before GST and is repeatedly positioned as a broad checkout and subscription option. Its standard settlement is one of the most disputed comparison cells, so insist on the approved T+ cycle and copy the exact launch offer from your account documents.
- UPI-mostly small business: PhonePe and Paytm appear in comparison cards around 1.99%, with T+1 often reported. PhonePe’s UPI-focused consumer presence may make it a candidate, but neither a consumer app’s popularity nor an undated free-rate display proves your merchant pricing or success rate.
- EMI-heavy or enterprise merchant: PayU is repeatedly associated with EMI and enterprise use cases, but its UPI pricing is plan-specific and some premium-method rates are higher than its general domestic rate. Compare the full method-by-method quote rather than treating “about 2%” as universal.
- Merchant that needs faster payouts: Easebuzz is cited for T+1 and an advertised T+0 option, but the cited T+0 price is not published. Cashfree’s 0.30% instant price is more explicit in November summaries. Ask either provider for the exact cutoff, eligible balance and fee before building it into your cash plan.
For marketplace payouts and split settlement, Cashfree is repeatedly described as a payouts and disbursal specialist, with Razorpay Route also named as an alternative in comparison coverage. For subscriptions and UPI AutoPay, Razorpay’s broader checkout tools may be relevant. For QR-only businesses, compare merchant pricing and settlement directly; this research does not establish QR-device or soundbox rental tariffs, so obtain those separately if the offer includes hardware.
What should the written quote say before I sign?
Ask for one schedule that removes ambiguity rather than relying on a price-card screenshot. It should identify the legal entity and merchant category, list fees for UPI, RuPay debit, other debit, credit, corporate and international cards, EMI and any other methods you accept, and state whether each rate is inclusive of GST.
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The quote should say whether MDR is included, excluded or passed through; which MDR category applies; how an MDR change during the contract is handled; and whether the current deduction is active for your account. It should also state promotion eligibility, start rule, cap, expiry and post-offer rate; the approved settlement cycle and payout clock time; instant or same-day fees and cutoffs; and refund and dispute treatment.
Include any setup or annual charge, volume-based repricing rule, and service needed for payouts, split settlements, subscriptions or payment links. Confirm the entity on your agreement: Drema’s 13 September comparison describes Razorpay, Cashfree Payments and PayU as RBI-authorised payment aggregators, but the merchant should still verify the contracted entity rather than infer it from a brand or advertisement. Keep the signed schedule and approval email; published cards differ across August, September and November 2026.
Frequently Asked Questions
Is the new UPI MDR already being charged in India?
The framework was announced for a 15 October 2026 start, but November reports said implementation had been deferred pending a fresh date. Because that is not a live status confirmation from NPCI, ask your acquiring bank or payment aggregator to confirm the deduction applying to your account today.
Can a payment gateway charge GST on a free UPI offer?
A 0% platform-fee offer would not create GST on a platform fee that is actually zero, but the offer may be limited by merchant eligibility, payment mix or GMV. Ask whether any separate service, acceleration or other fee remains chargeable and how GST applies to it.
Does UPI MDR go to the government?
The reported MDR is a merchant charge payable to the acquiring bank, not a tax collected by the government or NPCI. Reports say the amount is shared among ecosystem participants, but the exact split has not been published in the materials cited here.
What does T+1 settlement mean for a merchant?
It usually means payout on the next working day after a successful transaction, rather than the next calendar day. The provider’s cutoff, bank holidays, approval conditions and stated payout time determine when funds actually reach the merchant account.
