SBI Announces Zero MDR On UPI QR Payments Up To ₹1 Lakh, Know - Who Is Eligible & What It Means For Small Merchants?

Mumbai: State Bank of India (SBI) has revealed that small merchants can continue to receive UPI payments via QR codes without incurring Merchant Discount Rate (MDR) fees, as long as their monthly sales stay below Rs 1 lakh. Under SBI's UPI system, merchants can process QR code transactions up to Rs 1 lakh per month without any MDR charges, benefiting both merchants and customers. *T&Cs Apply. https://t.co/9NDq0guDnH — State Bank of India (@TheOfficialSBI) October 13, 2026 This announcement comes as discussions arise about implementing MDR on certain UPI merchant transactions after Diwali.

Who Qualifies for Zero MDR? According to SBI, small merchants processing transactions of up to Rs 1 lakh monthly through QR codes can avail themselves of zero MDR charges. The provision applies to Person-to-Person Merchant (P2PM) payments, subject to the bank's terms and conditions. This means eligible shopkeepers and small businesses accepting payments within the monthly limit will not face MDR charges.

Will Customers Pay Any Fees? SBI has assured customers that they won't be charged any MDR on UPI transactions. The bank's announcement aims to clarify concerns about potential transaction fees. However, the zero-MDR benefit for merchants is contingent on meeting eligibility criteria and adhering to the applicable payment framework.

What Is MDR? Merchant Discount Rate is a fee charged by payment service providers for processing digital payments. For small businesses, such fees can impact operational costs, particularly when digital transactions constitute a significant portion of sales. What After Diwali? The National Payments Corporation of India (NPCI) has scheduled MDR implementation on specific Person-to-Merchant UPI transactions to occur after Diwali.

The precise date will be announced separately. SBI, HDFC & ICICI Remain Domestic Systemically Important Banks. SBI's clarification sheds light on the zero-MDR facility for eligible small merchants under specific conditions. Small businesses should keep track of their monthly QR payment receipts and verify if their transactions qualify for the zero-MDR benefit.

Those exceeding the threshold should contact SBI for clarification on applicable charges. Meanwhile, customers must differentiate merchant-related MDR fees from other potential banking or payment service fees.