Debit Card & Credit Card MDR Charges in India

Last updated: 20 September 2026

⚠️ Disclaimer: This page is for informational purposes only and does not constitute financial or legal advice. MDR rates are subject to change. Always verify with your acquiring bank or payment service provider.
Quick Answer: RuPay debit cards carry 0% MDR. Visa and Mastercard debit cards are capped by RBI at up to 0.40% (cap ₹200) for merchants with turnover up to ₹20 lakh/year and up to 0.90% (cap ₹1,000) above ₹20 lakh/year. Credit card MDR has no uniform RBI cap and is negotiated with your bank (typically ~1.5%–2.5% + 18% GST).

While recent headlines focus on UPI MDR charges, merchants accepting card payments face three very different fee structures depending on whether a customer taps or swipes a RuPay debit card, a Visa/Mastercard debit card, or a credit card.

Debit Card vs Credit Card MDR at a Glance

Payment ModeApplicable MDRPer-Txn Cap18% GST on MDR
RuPay Debit Card0% (mandated zero MDR)NoneNo (₹0 MDR)
Debit Card (Visa / Mastercard) — Turnover ≤ ₹20 lakh/yrUp to 0.40% (POS) / 0.30% (QR)₹200 (POS)Yes
Debit Card (Visa / Mastercard) — Turnover > ₹20 lakh/yrUp to 0.90% (POS) / 0.80% (QR)₹1,000 (POS)Yes
Credit Card (Visa / Mastercard / RuPay)Market-determined (~1.5%–2.5% indicative)No RBI capYes
UPI P2M (Standard, > ₹2,000)0.4% (from 15 Oct 2026; ≤ ₹2,000 free)₹300Not confirmed

→ Compare exact deductions across UPI, Debit, and Credit Cards in the MDR Calculator

1. RuPay Debit Card MDR: 0%

RuPay debit card transactions have carried zero MDR since January 2020 under amendments to Section 10A of the Payment and Settlement Systems Act, 2007 and Section 269SU of the Income-tax Act, 1961 — as restated by the Ministry of Finance release of 19 March 2025.

For a merchant, accepting a RuPay debit card means 100% of the billed amount is settled with no MDR deduction and no GST on MDR.

2. Visa & Mastercard Debit Card MDR (RBI Caps)

For debit card networks other than RuPay, the Reserve Bank of India (RBI) sets maximum MDR ceilings under notification DPSS.CO.PD No. 1633/02.14.003/2017-18 (dated 6 December 2017, also restated in the Ministry of Finance release of 19 March 2025):

  • Small merchants (annual turnover up to ₹20 lakh): Capped at ≤ 0.40% of transaction value with a maximum fee of ₹200 per transaction on physical POS terminals (and ≤ 0.30% for QR-code debit card payments).
  • Larger merchants (annual turnover above ₹20 lakh): Capped at ≤ 0.90% of transaction value with a maximum fee of ₹1,000 per transaction on physical POS terminals (and ≤ 0.80% for QR-code debit card payments).

These are regulatory upper limits; your acquiring bank or payment aggregator may charge at or below these caps along with 18% GST on the MDR amount.

3. Credit Card MDR: Market-Determined Rates

Credit cards are credit instruments rather than bank-account debit instruments, so RBI does not enforce a uniform MDR cap on credit card transactions. Instead, credit card MDR is determined commercially between your business and your acquiring bank or payment aggregator.

  • Indicative range: Typically around 1.5% to 2.5% (unverified/indicative — varies by merchant category code, card variant, domestic vs international card, and monthly processing volume).
  • GST: 18% GST applies on the MDR fee deducted by the bank or payment gateway. GST-registered businesses can claim this as Input Tax Credit (ITC) — see our GST on MDR guide.
  • RuPay Credit Cards on UPI: When a customer pays with a RuPay credit card linked to a UPI app, credit card acquiring terms still apply rather than the 0.4% bank-account UPI MDR. Read our dedicated RuPay Credit Card on UPI MDR guide for details.

Worked Example: ₹10,000 Sale Across Payment Modes

Here is how much an acquiring bank would deduct on a ₹10,000 sale (assuming a merchant with turnover above ₹20 lakh/year and 18% GST on commercial card MDR):

  • RuPay Debit Card (0%): ₹0 MDR → you receive ₹10,000.00.
  • UPI P2M (0.4%, effective 15 Oct 2026): ₹40.00 MDR (GST applicability not confirmed) → you receive ₹9,960.00 before any GST.
  • Visa/Mastercard Debit Card (0.90% cap + 18% GST): ₹90.00 MDR + ₹16.20 GST = ₹106.20 total → you receive ₹9,893.80.
  • Credit Card (at 2.0% indicative + 18% GST): ₹200.00 MDR + ₹36.00 GST = ₹236.00 total → you receive ₹9,764.00.

Can Merchants Charge Card MDR to Customers?

No. Banks have been advised that merchants must not pass MDR on to customers as a surcharge. MDR is designed as a merchant acquiring fee for the convenience and settlement guarantee of accepting digital payments.

Debit & Credit Card MDR — FAQs

What is the MDR charge on debit cards in India?

Debit card MDR depends on the card network and the merchant's annual turnover:

  • RuPay Debit Cards: 0% MDR since January 2020 under Section 10A of the Payment and Settlement Systems Act, 2007 and Section 269SU of the Income-tax Act, 1961.
  • Visa / Mastercard Debit Cards (turnover up to ₹20 lakh/year): Capped by RBI at up to 0.40% on physical POS (maximum ₹200 per transaction) and up to 0.30% on QR-code transactions.
  • Visa / Mastercard Debit Cards (turnover above ₹20 lakh/year): Capped by RBI at up to 0.90% on physical POS (maximum ₹1,000 per transaction) and up to 0.80% on QR-code transactions.

Commercial debit card MDR attracts 18% GST on the MDR amount.

Why is RuPay debit card MDR zero while Visa and Mastercard charge MDR?
Under amendments to Section 10A of the Payment and Settlement Systems Act, 2007 and Section 269SU of the Income-tax Act, 1961 (confirmed in the Ministry of Finance release of 19 March 2025), RuPay debit cards and BHIM-UPI were notified with zero MDR to promote domestic digital payments. International card networks such as Visa and Mastercard debit cards continue to follow RBI's rationalised debit card MDR caps of up to 0.40% or 0.90%.
What is the MDR rate on credit cards in India?
Unlike debit cards, credit card MDR has no uniform regulatory cap from the RBI. Rates are market-determined and negotiated with your acquiring bank or payment gateway, typically ranging around 1.5% to 2.5% depending on merchant category, card type, and monthly volume, plus 18% GST on the MDR fee.
Can merchants pass debit card or credit card MDR charges to customers?
Banks have been advised that merchants must not pass MDR on to customers as an extra surcharge. MDR is a merchant acquiring cost deducted by the bank or payment service provider from the merchant's settlement.
Does 18% GST apply to card MDR charges?
Yes, for commercial debit card (non-RuPay) and credit card MDR, 18% GST is charged on the MDR fee amount, not on the full transaction value. For RuPay debit cards, since the MDR is ₹0, there is zero GST on MDR. GST-registered businesses can generally claim Input Tax Credit (ITC) on the GST paid on commercial card MDR.
How does card MDR compare with UPI P2M MDR?
For standard bank-account UPI P2M payments effective 15 October 2026, transactions up to ₹2,000 and small QR merchants (up to ₹1 lakh/month) have 0% MDR, while transactions above ₹2,000 carry a 0.4% MDR capped at ₹300. By comparison, RuPay debit cards remain 0% MDR, Visa/Mastercard debit cards are capped at up to 0.90% (cap ₹1,000), and credit cards carry higher commercial rates.

📑 Sources & Regulatory References

Last updated: 20 September 2026. Independent informational guide based on published government and regulatory notifications.