Where does your card payment fee go?

You pay the bill in full. The shop does not get all of it. Pick how the payment was made to see who takes a cut, and how much.

India · cards only (debit and credit) · rules and rates checked 6 Oct 2026

This fee is called MDR (Merchant Discount Rate). The shop pays it out of its own sales, and the customer's bill does not change. 18% GST is added on top of the fee.

1. Bill amount (₹)

Customer pays

Shop receives

Does the shop's size change this fee?

Who gets what, as a share of the fee

Same bill, every card (fee + GST)

The bar is fee plus GST. The dotted line is the usual range. Click a row to switch to that card.

How the fee grows with the bill

Card machine vs online checkout

A card machine stays close to what the banks charge. Online is usually one flat price, about 2%, even when the bank's own fee would have been nothing.

RazorpayCard machine⁶

Credit1.10–1.75%
Debit0.40–0.90%
RuPay debit0%

PaytmCard machine⁹

Credit1.20–1.99%
Debit0.40–0.90%
RuPay debit0%

RazorpayOnline⁶

Credit2%
Debit2%
RuPay debit2%

CashfreeOnline⁸

Credit1.95%
Debit1.95%
RuPay debit1.95%

New merchants can pay 0% up to ₹20 lakh a month, until 31 Mar 2027.

Premium, corporate and international cards cost more. These plans list no yearly fee. Machine rent is separate.⁷

Where a 2% online fee goesone example

Cashfree's example split⁸. On a ₹10,000 online card payment the shop pays a ₹200 fee, shared like this:

62.5%

12.5%

₹0₹200 fee

Customer's bankIssuer: fraud cover, rewards, credit period

1.25%₹125

Card networkVisa, Mastercard or RuPay

0.15%₹15

Acquirer bankThe gateway's partner bank

0.25%₹25

Payment switchLinks the acquirer to the networks

0.10%₹10

Payment gatewayRazorpay, Cashfree and similar

0.25%₹25

1 / 8The gateway keeps only about an eighth of what it charges. Most of the fee passes through to the banks.

Every rule in one place

Card	Fee the shop pays (before GST)	Status
RuPay debit	0% at a card machine. Online gateways still charge about 2% as a platform fee.	Official rule
Visa / Mastercard debit, shop up to ₹20 lakh a year	At most 0.40%, never more than ₹200 per payment (0.30% if paid through a QR code)	Official cap
Visa / Mastercard debit, shop above ₹20 lakh a year	At most 0.90%, never more than ₹1,000 per payment (0.80% if paid through a QR code)	Official cap
Credit card (Visa, Mastercard, RuPay)	No legal cap. About 1.1% to 2.5% at a card machine, about 2% online. Premium, corporate and international cards cost more.	Published rate
RuPay credit card, paid via UPI	Still a credit-card payment. 0% at small offline shops up to ₹2,000. Otherwise about 1.1% to 2.15%. The new 0.4% UPI fee does not apply.	Official rule
Tap (NFC), Samsung Wallet, Apple Pay	Same fee as the card behind them. Apple's reported ~0.2% comes out of the bank's share, not the shop's.	Reported
GST	18% of the fee, not of the bill. Shops registered for GST can usually claim it back.	Official rule

Good to know

The new UPI fee from 15 Oct 2026 (0.4% on payments above ₹2,000, max ₹300) applies to paying straight from a bank account through UPI. NPCI says² RuPay credit cards on UPI follow credit card rules instead. That is why this page covers cards only.
Apple Pay launched in India on 30 Sep 2026¹⁰. It works with Visa and Mastercard debit and credit cards from banks that have signed up, and more banks are expected to join. RuPay and UPI are not supported.
Samsung Wallet taps using Visa and Mastercard cards¹¹, debit or credit. RuPay cards work in it only through UPI, not by tapping.
Tapping a card without a PIN works up to ₹5,000. Above that you need the PIN. The fee is the same either way.
How each fee is split between the parties is an estimate. The one exception is online credit cards, which use the example split Cashfree publishes. Banks and networks do not publish exact splits, and the real split varies by card and contract.

Words explained

MDR (Merchant Discount Rate)

The fee a shop pays each time it accepts a card. It is a percentage of the bill and is taken out of the money the shop receives.

MDR vs TDR vs platform fee

Mostly three names for the same thing: the % taken from each payment. Cashfree calls it "TDR (also called platform fee or MDR)". The difference that matters is this. A card machine's rate is mostly bank fees set by the network. An online gateway's rate is one flat price that includes those bank fees plus its own cut. That is why an online gateway can charge 2% on RuPay debit even though the bank fee is zero by law. There, the whole 2% is the gateway's platform fee.

bps (basis points)

A small unit for percentages. 100 bps is 1%, so 20 bps is 0.2%. On a ₹20,000 bill, 20 bps is ₹40.

Issuer, acquirer, network, gateway

The issuer is the customer's bank, which gave out the card. The acquirer is the shop's bank. The network (Visa, Mastercard or RuPay) connects the two banks. A gateway or card machine company is the shop's tech partner that plugs it into all of this.

Interchange

The part of the fee that goes to the customer's bank. It is the biggest slice, and it pays for rewards, fraud cover and the interest-free credit period.

Platform fee

What an online gateway charges for its own service. It can apply even when the bank fee is zero by law, as with RuPay debit.

Fee cap

A limit on the fee in rupees. Example: a bigger shop pays at most 0.9% on a Visa debit card, but never more than ₹1,000. So every bill above about ₹1,11,111 costs exactly ₹1,000.

Turnover (shop size)

The shop's total sales in the previous financial year. For debit cards, RBI uses ₹20 lakh as the line between small and bigger shops.

NFC, tap and tokens

NFC is the chip that lets a card, phone or watch pay with a tap. Phone wallets like Samsung Wallet and Apple Pay replace your card number with a token, so the shop never sees the real number. The fee stays the same.

GST input credit

GST on the fee is 18%. A shop registered for GST can usually subtract it from the GST it owes. Ask your CA about your own case.

Official vs published vs estimate

Officialset by RBI, NPCI or the law. Published ratefrom a company's public price list. Estimate / Reporteda typical market figure or a news report. Actual rates vary by bank and contract.

Sources

RBI: Rationalisation of MDR for debit card transactions (Dec 2017). Debit card caps and the ₹20 lakh turnover line.
NPCI FAQ: MDR on select UPI payments (Sep 2026). Q36 covers RuPay credit cards on UPI. Also covers the 15 Oct start date and the 1.5% to 2.5% typical credit card range.
Ministry of Finance (Department of Financial Services): the same FAQ
NPCI circular on RuPay credit cards on UPI (Oct 2022, via The Hindu). Small offline shops pay nothing up to ₹2,000.
NPCI revision of fees for RuPay credit cards on UPI (Mar 2026, via a BSE filing). 6 bps each to the UPI app and its partner bank.
Razorpay pricing (online and POS)
Razorpay: guide to TDR, MDR, platform fee, AMC and setup fees (May 2026)
Cashfree payment gateway charges and Cashfree blog: gateway charges and how a 2% fee is split
Paytm for Business pricing (card machine). Standard EDC plan: credit about 1.20% to 1.99% by shop type. Visa and Mastercard debit 0.40% for a small shop, and 0.40% up to ₹2,000 / 0.90% above that for a bigger shop. RuPay debit 0%.
Business Standard: Apple Pay launches in India and TechCrunch: Apple's ~20 bps fee
Gizbot: which cards work in Samsung Wallet