The Real Benefit of 0% MDR on UPI with Paytm Payment Gateway

Saurin Parikh
2 min readNov 8, 2021


MDR or Merchant Discount Rate plays a crucial role in a business’s decision to integrate a payment gateway.

Simply put, payment gateway charges, or MDR, are the fees that a business incurs while accepting digital payments from its customers.

For example, when a customer purchases a product for Rs 1,000 from an online business and makes the payment digitally, the business has to pay a part of that Rs 1,000 to its payment gateway provider. How much cost does the business incur depends on which payment method the customer has chosen.

Typically, for most payment methods like credit cards, debit cards and wallets, the cost would be around 1.8%. Hence, for the Rs 1,000 paid by the customer, the business would get Rs 982. The remaining Rs 18 would be deducted by the payment gateway.

This is the cost associated with selling online and empowering your customers to pay you digitally. But a business does not have to incur a price every time.

Especially not when your customers pay you through UPI.

Paytm Payment Gateway is the only payment gateway in India that enables UPI payments acceptance at zero cost. Paytm Payment Gateway has 0% MDR on UPI.

This means that when a customer makes a purchase of Rs 1,000 through UPI, the business receives that entire Rs 1,000 if the business is using Paytm Payment Gateway to accept digital payments.

Let’s understand how this can translate into additional savings for a business.

Additional cost savings of Rs 97,700 every month

In the calculation below, we’ve considered a business with monthly sales volumes of Rs 1 crore. All of this volume has been generated through online payments, split between credit cards, debit cards, netbanking, UPI and wallets.

Looking at the larger market trends in India right now, and UPI’s surge as a preferred payment mode, we’ve estimated 40% of the transactions to be through UPI.

The two tables below show how much a business would pay as payment gateway charges to Paytm Payment Gateway and other payment gateways.

Read more on the Paytm for Business blog.



Saurin Parikh

Writer, content coach, content marketer, elderly millennial, cool dad. Published work: