Why does my payment gateway charge 2% on UPI when UPI is meant to be free?
By the Menuthere editorial team · Last updated
UPI has had zero MDR since January 2020, and the government pays banks an incentive instead. Razorpay says it still applies a 2% standard platform or technology fee for its dashboard, reporting and infrastructure.
- Zero MDR is the bank charge: the law removed the merchant discount rate on UPI and RuPay debit.
- The gateway adds its own fee: Razorpay states a 2% platform fee for its services.
- Cashfree: lists UPI charges as per the applicable law, and prices Instant Settlements from 0.30%, excluding GST.
- Compare before choosing: ask each gateway for the full UPI price in writing.
Connect the gateway you choose
Menuthere takes no commission or per-order fee on online payments. You connect your own gateway in India, so you can compare its fees yourself.
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Sources (4)
- Razorpay pricing, Razorpay, read 30 September 2026
- PIB: zero MDR on UPI and RuPay debit, PIB (Ministry of Finance), 24 March 2025
- Cashfree payment gateway charges, Cashfree Payments, read 30 September 2026
- Menuthere: online ordering, Menuthere, read 21 October 2026