The Department of Financial Services (DFS) has clarified RuPay Credit Cards linked to UPI follow the rules applicable to credit card transactions, while reiterating that any applicable MDR is borne by the merchant, not the customer.
In a post on the social media platform X, DFS, which falls under the Ministry of Finance said, "UPI “payments from bank accounts” and UPI “payments through credit cards” are economically different products."
RuPay credit cards linked to UPI follow credit card rules, where the transactions involve short-term loans provided by issuing banks.According to DFS, to promote RuPay CC on UPI among small merchants, no MDR is charged on transactions up to Rs 2,000 for merchants with an annual turnover of less than Rs 20 lakh.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Some facts with respect to the screenshot of settlement details posted above are as follows:
— DFS (@DFS_India) September 16, 2026
- The screenshot appears to be taken from a “merchant” side and not of a customer making a UPI payment. So, there is no argument of customer paying the MDR.
- UPI “payments form bank…
On Tuesday, the government narrowed the free UPI window and introduced a flat levy of Rs 5 on select transactions worth over Rs 2,000. For large merchant payments above Rs 2,000, a levy of 0.4% will be imposed. This fee, however, will be capped at Rs 300, the National Payments Corporation of India (NCPI) said in a statement on Tuesday.
DFS also explained," the UPI MDR Framework discussed in recent circular apply specifically to direct user-account-to-merchant-account UPI transactions. The same should not be mixed up with transactions where credit instruments are being used as payment mode."
The clarification comes after a social media user shared a screenshot of MDR being passed to the customers. The user alleged fee is being charged by banks, even for small merchants.
Denying the user's claim, DFS said, "the screenshot appears to be taken from a “merchant” side and not of a customer making a UPI payment. So, there is no argument of customer paying the MDR."
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
