(This article was first published on Paytm for Business blog.)

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

Most payment gateways available in India today offer quick online onboarding, easy integration, PCI-DSS level security, support for multiple payment methods, and other similar features. But more often than not, the decision that an entrepreneur or small business owner takes boils down to the payment gateway charges.

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 ₹1,000 from an online business and makes the payment digitally, the business has to pay a part of that ₹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 ₹1,000 paid by the customer, the business would get ₹982. The remaining ₹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 ₹1,000 through UPI, the business receives that entire ₹1,000 if the business is using Paytm Payment Gateway to accept digital payments.

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

Additional cost savings of ₹97,700 every month

In the calculation below, we’ve considered a business with monthly sales volumes of ₹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.

Charges incurred on Paytm Payment Gateway
Payment modeTransaction percentage splitBusiness volume (crores)Paytm MDRCharges (₹)
Credit card10%0.101.99%19,900
Debit card15%0.150.85%12,750
Charges incurred on other payment gateways
Payment modeTransaction percentage splitBusiness volume (crores)Paytm MDRCharges (₹)
Credit card10%0.102.00%20,000
Debit card15%0.152.00%30,000

As you can see, that’s a difference of ₹97,700! That’s money that a business doesn’t need to pay to a payment gateway, which becomes additional cost saving for it. 

This is a business cost that can be saved more and more every month with the growing adoption of UPI as a payment method. UPI transactions have been breaking milestones every month – going above 3.5 billion in August 2021.

It’s no surprise then that a business needs to accept payments through UPI. However, the business doesn’t need to pay for it. Not with Paytm Payment Gateway. 

Alongwith 0% MDR on UPI, Paytm Payment Gateway offers 0% MDR on RuPay debit cards as well. 

Added benefits of UPI payments with Paytm Payment Gateway

Paytm Payment Gateway offers intuitive UPI follows that enable frictionless payment experiences for your customers:

  • UPI Intent: Allow customers to pay from any UPI app on their smartphone without them having to toggle between your app, UPI app and SMS app
  • UPI InApp: Display UPI-associated bank accounts of customers directly on your app, allowing them to select an account and make the payment
  • UPI Collect: Allow customers to enter their UPI VPA address to complete the payment on your app

With Paytm Payment Gateway, businesses also get:

  • Industry-high success rates
  • T+1 settlements, without holidays
  • Support for 2,500 transactions per second

And a lot more. 

So go ahead and make an informed decision that provides a quantifiable benefit to your business. Choose Paytm Payment Gateway today.


  • Paytm Payment Gateway has 0% MDR on UPI payments
  • Businesses don’t need to pay any charges when accepting payments through UPI
  • For a business doing monthly volumes of ₹1 crore, this translates into savings of ₹97,700
  • Other payment gateways charge 2% on UPI payments