February 21, 2025 · 12 mins read
Santosh Kumar
Money is an essential and determining factor in everyone's life in the present world. To transfer the money of how much we want, this digital era has provided us with plenty of options and left the choice to our hands to choose the convenient ones. It has been made easier to transfer money to a person or a business from wherever you are, no matter when you would like to initiate the transaction. This advent of digital payment platforms, such as UPI, NEFT, IMPS, etc., has changed our lifestyle into cashless transactions. In the past eras, when people used cash and goods for their purchases, we developed a lot with digitalization. These cashless transactions gave the reason for the existence of digital payment platforms and also the multi-purposes of cards like debit and credit cards.
The introduction of credit cards has been a boon to many, considering its usage. One of India's most popular kinds of credit cards is the RuPay credit card. It is due to its nature of being customer-centric, affordable and available in other countries apart from India. So, you don't have to worry about getting a new credit card if you travel or go to another country. This RuPay credit card can be linked to the UPI to make payments and in this blog, let us see the RuPay credit card UPI charges on merchants.
Read More:: How to Check CIBIL Score on Phone Pe
The elaborated version of the RuPay card is the 'Rupee and Payment' card. It is a multinational financial service and the first-ever global card payment introduced in India; it is owned by the National Payments Corporation of India (NPCI). It was launched in the year 2012 in alliance with the Reserve Bank of India (RBI) to implement both the domestic and multilateral or international payments possible for the people in India. The main motto of launching RuPay card in India is to introduce an alternative source for Visa and Mastercard. This is because both Visa and Mastercard are foreign-based cards, and India needed a self-originated card for seamless transactions. This indicates the successful birth reason for the RuPay card.
RuPay card offers its services with debit cards, credit cards, prepaid cards, and government scheme cards. These RuPay cards can be used by linking with UPI or are available at all ATMs and can be used worldwide. The merchants have also used it to receive money from the people, and for that, they are in need to pay a certain amount as a charge to their bank. This process is what we are going to discuss under RuPay credit card UPI charges on merchants. The RuPay card also offers combined service of combo cards like credit and debit features available in a single card, debit and prepaid features combination, and credit and prepaid featured cards.
Read More:: How does UPI Mandate Work
RuPay credit card is similar in its role to what the other credit cards are supposed to be doing so far. It allows people to make purchases and pay the merchants, and later, you can settle the amount either in a full-time instalment or overtime instalment like a monthly instalment with interest. You can link your RuPay credit card with UPI (Unified Payments Interface) so that it will be easy for you to make easier and quicker transactions, thereby empowering all the benefits of UPI.
With this UPI linked with a RuPay credit card, you can make payments to merchants, irrespective if they are in urban or rural areas. Because the RuPay credit card has been widely accepted in most of the banks in India, it makes it hassle-free. You can pay to any merchant, considering that the RuPay card is associated with the local banks, and the merchant's mode of payment will accept transactions from the RuPay credit card. Also the merchants will also prefer this RuPay card transaction since India owns it, and they do not have to pay a lot for this credit card payment. It is also vital to be aware of the RuPay credit card UPI charges on merchants to get better clarity of why merchants select it for their transactions.
One of the advantages of using RuPay credit card is the opportunity to receive rewards depending on the transactions made with it. Not only are rewards awarded for payments, but the card also offers various discounts and cashback offers for all categories of purchases. Another significant and appreciable benefit of the RuPay credit card is its low-cost maintenance, which starts at five hundred rupees only.
Read More:: Rupay Credit Card UPI Charges
Before getting into the detailed analysis of RuPay credit card UPI charges on merchants, it is vital to know that charges will be applied to the merchants to receive money from the customers' credit or debit cards. As per the terms of the RuPay credit card, there is a certain value that the merchants need to pay to their respective banks to receive the money further. Let us look into the elaborated outline of RuPay credit card UPI charges on merchants.
Initially, the merchants will display their QR code or the mobile number linked with their account, especially the RuPay credit card linked account, to receive money. So, the customers will scan and pay the merchants with that help. Here, the customers can use either their debit or credit card. It doesn't matter if they're using a debit or credit card because to receive the money, the merchants are in need to pay a certain percentage to the bank. This kind of RuPay credit card UPI charges on merchants are classified under MDR, which stands for Merchant Discount Rate.
MDR is nothing but a fee or charge that merchants have to pay in order to receive money from customers. However, it will not charge for every single transaction done by customers. It has certain limits and thresholds for the charge to be imposed upon the merchants. This makes it a little easier for them because the merchants do not have to pay a certain value for each transaction.
So, the initial or the starting stage of the charge on merchants for RuPay credit card UPI transactions will range between 1% to 3% of the transaction value if it is above Rs 2000 paid by the customers via their debit or credit card. From this, up to 1.5% of the charge goes to the card issuing bank and the rest is shared among the merchant’s bank and the card network. This MDR charge has been shared between the merchants and the banks, covering costs like payment processing charges, interchange fees, assessment fees, gateway fees and so on.
Read More:: MDR Charges on Rupay Credit Card
When the customer makes a transaction, for example, at the store using a POS machine (Point of Sale), the bank charges the merchant an MDR fee. This received charge is then split up between the bank that issued the card, the payment network like if it is RuPay or Visa or Mastercard (here, let us assume it is RuPay considering this as the focus) and the bank which was linked with the POS of the merchant. Depending upon all these processes, the MDR value has been determined and imposed upon the merchants. Also, this MDR in RuPay credit card is levied based on the goods and services tax. However, in this process, the customers are not charged in the name of any extra charges apart from what they need to pay for their purchases.
Again, the charges that RuPay credit card UPI imposes on merchants can vary depending on their business category. For instance, they may be classified as small, medium, or large business types.
For small businesses: Businesses with a turnover of less than or equal to 20 lakh per annum are subjected to a lower Merchant Discount Rate.
Medium or large businesses: These businesses are categorized as medium or large if their turnover is more than 20 lakh per annum and they will have to pay higher MDR compared to the small businesses
Low-risk businesses: The businesses that come under education, utility or Government payments have lower MDR
High-risk businesses: E-commerce and the donations of charity categories of businesses or merchants linked with such businesses are supposed to pay high MDR
If a business or merchant has a lower turnover, its MDR will also be lower. If it has a higher turnover than the limited threshold, it is supposed to pay a slightly higher MDR charge than smaller ones. So, it will be appropriate to mention that RuPay credit card UPI charges on merchants are directly proportional to their turnover.
Due to the lower turnover, small businesses cannot pay more than 0.4% of their total transaction value as an MDR charge, which can make the maximum MDR value Rs 200. On the contrary, large businesses will pay up to 0.9% of the transaction value as an MDR charge, and their maximum charge would be Rs 1000.
Read More:: How Much Money Can We Transfer Through PhonePe?
Certain factors determine the reason for the charges. Those factors include interchange fees, assessment fees, payment processor fees, fraud prevention fees, etc. It is always better to be acquainted with the reasons for what reasons the charges are imposed. The interchange fee is the charge set by the cards' associations, depending on whether it is a credit, debit, or prepaid card. The assessment fee is based on the usage of the credit or debit card by the merchants. It calculates how often they use their cards. The payment processor fee is subjected to the gateway through which the transaction is processed. So, the percentage of the charges that the merchants pay with RuPay credit card UPI usage includes all those above categories, and they're not charged apart from the process.
Throughout this blog, we have seen how RuPay credit card UPI works and its charge on merchants for using it as a mode of transaction for their customers. Even though the merchants have to pay a certain percentage as a charge from the amount they receive from the customers, it has been verified that their profits are not disturbed in this process. It actually works as a profitable source since it makes all the transactions possible irrespective of any banks and cards. However, it is also noticeable that the RuPay credit cards have been linked with most of the local banks of India, like State Bank of India (SBI), HDFC bank, ICICI bank, Axis Bank, Bank of Baroda, Yes Bank and so on. This makes the job easier and more user-friendly since these banks are accessible to all the residents of India if they meet the criteria for having a bank account and credit card.
Is it legal for merchants to charge customers for MDR?
As per the Reserve Bank of India policy, merchants are prohibited from levying additional fees for customers to cover the RuPay credit card charges that they pay. Hence, it is not legal for merchants to charge customers for what they have to pay.
What is the limit of RuPay credit card UPI for a day?
The limit of RuPay credit card UPI will rely on the UPI application to which it has been linked. But, as of now, no specific limits are drawn apart from the app's restriction of amount limit. With this, the limit will be mostly one lakh rupees, but if you need to extend the limit, it could be increased to 2 lakh rupees per day.
Can RuPay credit cards be added to GPay and PhonePe?
Yes, you can add your RuPay credit card to your GPay and PhonePe applications and link it with its UPI to make payments to merchants. All you have to do is link your RuPay credit card to their UPI and set up the UPI PIN for safe and secure transactions.
How can I avoid the Merchant Discount Rate for the transaction?
If you are getting a transaction that is below Rs 2000, then there is no need to worry about the charge that will be applied on RuPay credit card UPI. This is because the Merchant Discount Rate will only come into action when the transaction goes more than Rs 2000. If it is below that threshold, you can easily avoid the charge.
What don'ts should be followed with a RuPay credit card on UPI?
The most important step would be keeping your UPI pin safe and secure, which you should not share with anyone at all. Also, it is highly advised not to share any OTPs you receive during registration. RuPay credit card on UPI requires the users to adhere to the credit limits assigned by the card issuer while making any transactions. Please do not use your RuPay credit card on UPI to make person-to-person payments since it is not the purpose of this card.
Download the app now
Download the app from PlayStore
