UPI Bank-Account MDR by Ticket Size (Post-15-Oct-2026): The Three-Band Schedule + Sub-Rail Overlay

A B2B SaaS company billing customers at an average ticket of ₹4,999 per cycle frequently sees its UPI mix climb above sixty percent of monthly receivables. Before 15 October 2026, the CFO could conclude the rail was free at every ticket size on bank-account UPI, with the only sub-rail leakage sitting under PPI-on-UPI and RuPay-credit-on-UPI. From 15 October 2026, that conclusion no longer holds on the bank-account UPI child itself: at ₹4,999 per transaction, the notified MDR is 0.4% flat = ₹20 per transaction, or ₹20,000 per crore of bank-account UPI volume in that band. On ₹2 crore monthly bank-account UPI volume of which 85% sits above ₹2,000, that is 2 x 0.85 x 400 = ₹68,000 of legitimate monthly MDR that must now be modelled into the cost of receivables, plus 18% GST on the fee, plus the residual PPI and RuPay-credit-on-UPI sub-rail interchange that continues on the pre-15-October schedule unchanged.

This article walks through the new three-band bank-account UPI schedule, the sub-rail overlay that persists inside it, the worked calculations (₹3,000, ₹50,000, ₹1,00,000), and the reconciliation discipline that separates each band’s expected MDR from the residual leakage — the audit is no longer binary but band-aware.

Quick-Reference: UPI MDR by Ticket Size (Post-15-October 2026)

Three UPI sub-rails, three ticket bands, plus sector overrides on bank-account UPI. Effective 15 October 2026.

Bank-account UPI (P2M) — three-band schedule

Adjacent UPI sub-rails — unaffected by the new bank-account UPI MDR

Common attributes across all UPI sub-rails

The three-band bank-account UPI schedule replaces the six-year zero-MDR framework that ran from 1 January 2020 through 14 October 2026 (historical reference at UPI Zero-MDR Regime (1 Jan 2020 - 14 Oct 2026)). Adjacent sub-rail schedules are unchanged. The notified post-15-October framework is currently subject to a pending Supreme Court challenge (PIL filed 16 September 2026).

Three worked examples per FAQ Q35

The NPCI FAQ dated 15 September 2026 sets out three worked examples in Q35 that a controller should have on hand for verification:

• Transaction of ₹3,000 on bank-account UPI (mid-band): 0.4% x ₹3,000 = ₹12 — the notified MDR. This is the mid-band linear calculation.
• Transaction of ₹50,000 on bank-account UPI (mid-band, upper end): 0.4% x ₹50,000 = ₹200 — still in the linear 0.4% band, just below the cap threshold.
• Transaction of ₹1,00,000 on bank-account UPI (above cap threshold): capped at ₹300, not the raw 0.4% x ₹1,00,000 = ₹400. The cap kicks in at ₹75,000; above that, the deducted MDR stops growing with ticket size.

For a ₹5,000 fuel-station transaction, the essential-service sector override applies: the notified charge is flat ₹5, not ₹20 (which would be 0.4%). For a ₹50,000 mutual-fund SIP debit on bank-account UPI to a SEBI-registered AMC, the capital-markets override applies: 0.02% x ₹50,000 = ₹10, not ₹200. Both overrides materially reduce the notified MDR for the sectors that qualify — a merchant in one of these categories should not accept a settlement file that bills at the standard 0.4%.

Why Does Ticket Size Matter Now on Bank-Account UPI?

Because the 15 October 2026 notification made ticket size the primary determinant of the MDR on bank-account UPI itself, not only on the adjacent sub-rails. Before the amendment, bank-account UPI was zero MDR at ₹49, at ₹499, at ₹4,999 and at ₹49,999 — Section 10A of the PSS Act closed the question at every ticket band. After the amendment, the same rail runs at zero for the ₹49 and ₹499 transactions, at 0.4% (₹20) for ₹4,999, and at 0.4% (₹200) for ₹49,999. At ₹1,00,000, the ₹300 cap kicks in — a raw 0.4% would give ₹400, but the cap stops the deduction at ₹300.

Ticket size also continues to matter because the parent UPI line in the gateway settlement file is not one rail. It remains at least three rails sharing a label:

• Bank-account UPI — now three-band on ticket size per the schedule above.
• PPI / wallet-on-UPI — NIL at or below ₹2,000, 0.5%-1.1% above (NPCI 24 March 2023 circular, unchanged).
• RuPay credit-on-UPI — NIL at or below ₹2,000, approx 2% above (NPCI October 2022 circular, unchanged and explicitly excluded from the new MDR per FAQ Q36).

A merchant whose average ticket sits comfortably below ₹2,000 — quick-service food (excluding fuel/utility which qualify for the sector override anyway), microtransactions, low-value content unlocks — sees zero chargeable volume on bank-account UPI and effectively no sub-rail interchange either. A merchant whose average ticket sits between ₹2,000 and ₹75,000 — B2B SaaS at ₹4,999, hotel chains at ₹8,000-₹15,000, NBFC EMI collection at ₹15,000-₹40,000 — now carries both a 0.4% bank-account UPI MDR and the residual sub-rail interchange above ₹2,000. A merchant whose average ticket sits above ₹75,000 — high-value B2B invoicing, wealth management, real-estate booking amounts — carries the capped ₹300 per transaction on bank-account UPI plus the residual sub-rail interchange (which itself does not cap in the same way — the 2% RuPay-credit-on-UPI rate keeps climbing with ticket size). The ticket-size bucketing routine therefore exists to (a) verify the notified rate on bank-account UPI band by band, (b) verify the ₹300 cap is enforced on the largest transactions, (c) surface the sub-rail interchange inside the parent UPI line as previously, and (d) confirm the sector override where applicable.

What Is the Detection Rule for Bank-Account UPI Leakage Post-15-October?

The detection rule is band-aware, not binary. It runs in three sub-rules on the bank-account UPI child, plus the sector override.

Sub-rule one — at or below ₹2,000: binary, zero tolerance. The expected network MDR is zero. Any positive deduction is a leakage flag, recoverable against the gateway. RuPay debit is the same across its full ticket range — always zero, any positive deduction is a flag.

Sub-rule two — above ₹2,000 and below ₹75,000: banded, 0.4% expected (or sector override). For most merchant categories the expected rate is 0.4% flat; a materially different rate is a flag. For the essential-service categories with a stated figure (railways, telecom, insurance, fuel, utility bill collection), the expected charge is flat ₹5 per transaction — anything meaningfully higher is a flag; for education, Q42 commits to flat-fee-or-capped without a figure, so confirm the aggregator-applied rate before flagging. For capital-markets categories (AMCs, brokers, dealers), the expected rate is 0.02% — anything meaningfully higher is a flag. The variance class carries the merchant-category-code lookup as an input, since the sector override materially changes the deterministic check.

Sub-rule three — at or above ₹75,000: cap enforcement, per-transaction ceiling. The expected charge is at most ₹300 per transaction (or ₹300 for capital-markets under the 0.02% cap regime; the essential-service override caps at flat ₹5 which is well below ₹300). Any deduction exceeding ₹300 on a single transaction is a cap-breach flag. The variance grows with ticket size — on a ₹5,00,000 transaction, a raw 0.4% would be ₹2,000; the cap caps it at ₹300; a settlement file that continues to bill 0.4% linearly above ₹75,000 leaks ₹1,700 per such transaction.

The discipline continues to separate “network MDR” from “gateway platform fee” — a gateway platform fee is a legitimate, contracted commercial line that does not contradict the notified schedule (which prohibits the interchange charge only in the zero-MDR bands and specifies it in the notified bands). The reconciliation engine therefore expects: the correct band-aware notified MDR (or the sector override) on bank-account UPI, plus whatever flat or percentage platform fee the merchant has contracted for, plus 18% GST on both fee components.

How Do PPI-on-UPI and RuPay-Credit-on-UPI Show Up in the Settlement File?

The cleanest path is the payment-instrument sub-type field that gateways expose alongside the parent method. Razorpay, PayU, Cashfree, and PhonePe all carry a sub-type identifier — wallet provider name for PPI-on-UPI, RuPay-credit indicator for credit-on-UPI — even when the parent method field reads UPI. Juspay, as an orchestration layer in front of the underlying gateway, exposes the same sub-type through its routing payload.

Two practical signals matter. First, the wallet identifier itself — Paytm wallet, PhonePe wallet, MobiKwik, Amazon Pay, Freecharge — distinguishes a PPI-on-UPI transaction from a bank-account UPI transaction whose UPI handle happens to belong to the same operator’s bank app. The handle alone is not enough; the wallet identifier in the sub-type field is. Second, the RuPay credit-on-UPI indicator is a separate Boolean exposed in the instrument detail, since the same handle can ride bank-account UPI in one transaction and RuPay credit in the next.

Once the sub-type is captured, every UPI transaction is routed to one of the three children before the expected-rate lookup runs. Bank-account UPI gets the zero schedule. PPI gets the 0.5% to 1.1% schedule above ₹2,000 and NIL at or below. RuPay credit gets the ~2% schedule above ₹2,000 and NIL at or below.

What Does the Bucketing Look Like for a D2C Subscription vs a B2B SaaS Post-15-October?

Both profiles now carry legitimate bank-account UPI MDR where the ticket sits above ₹2,000, plus the residual sub-rail interchange as before. The bucketing routine is the same but the expected-cost profile has shifted.

D2C subscription brand at ₹499 average ticket. At ₹2 crore monthly UPI receivables, roughly 95% bank-account UPI within the UPI parent, PPI and RuPay-credit-on-UPI together at 5%, average ticket well below the ₹2,000 threshold on every sub-rail:

• Bank-account UPI at ₹499 x volume: 95% x ₹2 crore = ₹1.9 crore. Every transaction sits in the at-or-below-₹2,000 zero-MDR band. Legitimate MDR: ₹0. Any positive deduction is a Sub-rule-1 flag.
• PPI-on-UPI at ₹499 x volume: 3% x ₹2 crore = ₹6 lakh in the NIL sub-rail band. Legitimate interchange: ₹0.
• RuPay-credit-on-UPI at ₹499 x volume: 2% x ₹2 crore = ₹4 lakh in the NIL sub-rail band. Legitimate interchange: ₹0.
• Total legitimate MDR + interchange on the UPI parent: ₹0. The parent rail remains effectively free at the interchange layer for this profile.

B2B SaaS at ₹4,999 average ticket. At ₹2 crore monthly UPI receivables, roughly 88% bank-account UPI, PPI-on-UPI 8%, RuPay-credit-on-UPI 4%, average ticket ₹4,999 (mid-band, no cap yet):

• Bank-account UPI at ₹4,999 x volume: 88% x ₹2 crore = ₹1.76 crore. Every transaction sits in the ₹2,000-₹75,000 mid-band. Legitimate MDR: 0.4% x ₹1.76 crore = ₹70,400 per month. Any deduction materially different is a Sub-rule-2 flag.
• PPI-on-UPI at ₹4,999 x volume: 8% x ₹2 crore = ₹16 lakh above the ₹2,000 threshold. Legitimate interchange: 1.1% ceiling = ₹17,600 per month (unchanged, unaffected by the new bank-account UPI MDR).
• RuPay-credit-on-UPI at ₹4,999 x volume: 4% x ₹2 crore = ₹8 lakh above the ₹2,000 threshold. Legitimate interchange: approx 2% = ₹16,000 per month (unchanged).
• Total legitimate MDR + interchange on the UPI parent: ₹70,400 + ₹17,600 + ₹16,000 = ₹1,04,000 per month. Plus 18% GST on the fee = ₹18,720. Total legitimate monthly cost: ₹1,22,720.

Pre-15-October, this brand’s legitimate cost on the UPI parent was ₹33,600 (sub-rail interchange only). Post-15-October, it is ₹1,04,000 before GST — the bank-account UPI band contribution (₹70,400) is new legitimate cost that must be modelled into the P&L. It is not leakage; it is the notified schedule. Leakage on this profile is a separate question and is now surfaced by the three sub-rules above:

• An erroneous 1% MDR on the bank-account UPI child (rather than the notified 0.4%) is ₹2 crore x 88% x 0.6% = ₹1,05,600 of monthly leakage recoverable in full — over-billing of a legitimate charge, Sub-rule 2.
• An erroneous 0.4% MDR applied to bank-account UPI transactions at or below ₹2,000 is a Sub-rule 1 flag, recoverable in full for that volume.
• A settlement file that bills 0.4% on transactions at or above ₹75,000 without cap enforcement is a Sub-rule 3 flag, recoverable to the extent the deduction exceeds ₹300 per such transaction.

Large-ticket profile: NBFC EMI collection at ₹40,000 average ticket, ₹5 crore monthly volume. Roughly 90% bank-account UPI, essentially all of it sits in the ₹2,000-₹75,000 mid-band. Legitimate MDR: 0.4% x ₹4.5 crore = ₹1,80,000 per month. Add sub-rail residuals as above. Since the ticket sits well below the ₹75,000 cap threshold, no cap enforcement matters yet for this profile.

Very-large-ticket profile: wealth-management SIP or real-estate booking at ₹2,00,000 average ticket, ₹20 crore monthly volume. Every bank-account UPI transaction sits above the ₹75,000 cap threshold. Raw 0.4% would give ₹20 crore x 0.4% = ₹8,00,000 monthly. Cap enforcement pulls it to ₹300 per transaction x (₹20 crore / ₹2,00,000) = 1,000 transactions x ₹300 = ₹3,00,000 per month. The ₹5,00,000 monthly saving is the direct effect of the ₹300 cap. A settlement file that continues to charge 0.4% linearly on this profile leaks ₹5,00,000 per month — a Sub-rule 3 flag, recoverable per transaction.

What Is the Reconciliation Discipline Around the ₹2,000 and ₹75,000 Thresholds?

The discipline is now five rules, run as separate variance classes on the same settlement file. Three cover bank-account UPI (the new three-band schedule), two cover the adjacent sub-rails (unchanged), and a sixth cross-cutting check covers refund-interchange retention across all bands.

Rule one — bank-account UPI, at or below ₹2,000: zero-tolerance flag. Expected network MDR: zero. Any positive deduction raises a UPI_BANK_ACCOUNT_ZERO_BAND_POSITIVE_MDR variance, recoverable in full. Flags rate-card mis-mappings (gateway has billed at the mid-band 0.4% on a low-ticket transaction), platform-fee mis-classifications (legitimate platform fee landed in the MDR column), and residual pre-15-October card-slab mis-mappings.

Rule two — bank-account UPI, above ₹2,000 and below ₹75,000: notified-rate check. Expected network MDR: 0.4% flat, or the sector override (flat ₹5 for essential-services, 0.02% for capital markets). Tolerance is tight — a two basis-point drift is the audit threshold. Materially different deductions raise a UPI_BANK_ACCOUNT_MID_BAND_RATE variance, with the merchant-category-code as an input to select the correct expected rate. Where a merchant qualifies for a sector override, the audit expects the override rate on every transaction in the merchant’s UPI QR flow; a mixed override (some transactions at the standard 0.4%, others at flat ₹5) is itself a flag.

Rule three — bank-account UPI, at or above ₹75,000: cap-enforcement check. Expected network MDR: at most ₹300 per transaction. Any deduction above ₹300 raises a UPI_BANK_ACCOUNT_CAP_BREACH variance, recoverable per transaction (the recoverable grows with ticket size beyond ₹75,000; on a ₹5,00,000 transaction, the raw 0.4% would be ₹2,000 and the cap is ₹300, a ₹1,700 per-transaction recoverable). For capital-markets categories the cap is the same ₹300 but reached at a much higher ticket (0.02% x ₹15,00,000 = ₹300); the cap-breach flag applies identically.

Rule four — sub-rail below-threshold check. PPI-on-UPI and RuPay-credit-on-UPI both carry NIL interchange at or below ₹2,000. Any positive interchange in this band is a leakage flag. The variance class — UPI_SUBRAIL_BELOW_THRESHOLD — handles both children together since both share the threshold structure. Unaffected by the 15 October regime change.

Rule five — sub-rail above-threshold rate check. Expected interchange on PPI-on-UPI above ₹2,000: 0.5% to 1.1% (upper limit depends on merchant category code); on RuPay-credit-on-UPI above ₹2,000: approx 2% (approx 1.5% issuer + approx 0.5% network/acquirer). A ten basis-point excess is the audit threshold. Unaffected by the 15 October regime change (the new bank-account UPI MDR explicitly excludes RuPay-credit-on-UPI per FAQ Q36).

All five rules run alongside a refund-interchange-retention check, since interchange (and the new bank-account UPI MDR) is industry-wide non-refundable. A refunded ₹4,999 bank-account UPI transaction retains the ₹20 of notified MDR paid on the original; a refunded ₹4,999 RuPay-credit-on-UPI transaction retains the approx ₹100 of interchange; the merchant’s books should reflect both retained costs separately rather than expecting netting against a future settlement.

An additional cross-cutting monitor applies for merchants near the P2PM small-merchant threshold: aggregate rolling monthly inward UPI QR receipts against the ₹1 lakh/month ceiling; alert the finance team when the rolling 3-month average approaches the threshold; formally trigger a re-baseline of the MDR profile (from zero-P2PM to the band-aware P2M schedule) when three consecutive months exceed ₹1 lakh, per FAQ Q29. This monitor did not exist pre-15-October and is a new reconciliation obligation for merchants in the P2PM band.

How Should the Variance Report Cross-Link to GST and TDS Reconciliation?

The 18% GST on every interchange line is recoverable as Input Tax Credit. The gateway issues a monthly consolidated tax invoice that totals MDR, interchange, platform fees, and any subscription or AutoPay add-ons, and applies a single 18% GST line on the sum. The reconciliation engine should never fold that 18% into the per-transaction percentage; the GST is a separate line, claimed in GSTR-3B against GSTR-2B presence.

The TDS overlap arises only for merchants who sell through an e-commerce operator on the participant side. Income-tax Act §194O (legacy section) maps to §393(1) Sl. 8(v) under the Income-tax Act 2025 framework with payment code 1035 at 0.1% on the gross amount credited or paid to the participant — the operator deducts; the participant reconciles to Form 26AS. Where the SaaS company in our worked example is the operator (selling its own subscription directly), §194O / §393(1) Sl. 8(v) is not triggered on its own UPI receipts. Where it is the participant — selling via a third-party marketplace that collects on its behalf — the 0.1% TDS is a separate reconciliation line, and conflating it with gateway MDR understates the cost of capital on receivables.

GST on MDR/interchange is unchanged in law: 18% on the fee, not on the transaction value, always a separate line.

What Triggers a Re-Baseline of the UPI Reconciliation Policy?

Three events should force a re-baseline.

First, a binding RBI or Ministry of Finance notification introducing a tiered or 30 bps MDR on UPI P2M. The Parliamentary Standing Committee report of 12 March 2026 and the Payments Council proposal would land as such a notification if they progress. The expected-rate table for bank-account UPI would switch from zero to a tiered schedule that day; the binary detection rule on the bank-account child would become a banded check.

Second, an NPCI circular adjusting the PPI-on-UPI ceiling or the RuPay-credit-on-UPI split. The schedules in force date to 24 March 2023 (PPI) and October 2022 (RuPay credit); a revision would change the expected interchange table and would need to flow through to the engine on the effective date specified in the circular.

Third, a contracted rate-card change with the gateway — for instance, the gateway introducing a UPI platform fee separate from the parent MDR, or moving an existing platform fee under a different label. The reconciliation policy should anchor against the contract, not the published rate, and the contracted line should be updated whenever the gateway’s rate card moves.

Continue Reading in the Merchant-Fees Cluster

• UPI MDR 2026: the definitive current-state flagship — the 0.4% P2M merchant charge effective 15 October 2026, full band schedule, sector overrides, P2PM small-merchant exemption + graduation rule, and the six-check merchant reconciliation playbook. Currently subject to pending Supreme Court challenge (PIL filed 16 September 2026).
• PPI / wallet-on-UPI interchange at 1.1% above ₹2,000 — the NPCI 24 March 2023 circular in full, with the wallet-loading 15 bps fee borne by the issuer separated from the interchange the merchant bears.
• RuPay credit-on-UPI 2% interchange above ₹2,000 — the issuer / network / acquirer split, the October 2022 NPCI circular, and the reconciliation pattern for the ~2% above-threshold interchange.
• MDR charged on zero-MDR UPI / RuPay debit leakage — the cornerstone leakage pattern this article’s binary detection rule operationalises.
• UPI zero-MDR regime under §269SU and PSS Act §10A — the regulatory backbone.
• Merchant-fee leakage hub — every leakage pattern in the cluster, with the seven deterministic detection rules.
• Payment gateway reconciliation money page — the operational reconciliation page for finance teams running gateway settlement files at scale.

For the NPCI position on UPI sub-rails, see the National Payments Corporation of India reference page on UPI rails and interchange schedules.