Card swipe machine charges for doctors: MDR explained RBI's debit card caps, zero MDR on RuPay debit, credit cards, and what to ask the bank before you sign.

A clinic pays a merchant discount rate on each card payment, deducted by the bank before the money reaches the clinic account. On debit cards RBI caps it: for a merchant whose turnover in the previous financial year was up to ₹20 lakh, no more than 0.40% of the bill on a card machine, capped at ₹200 per transaction; for larger merchants, 0.90%, capped at ₹1,000. RuPay debit cards carry no MDR. Credit card MDR is set by the bank and the card network, so it is the figure to negotiate.

What is MDR, and who keeps it?

RBI's Discussion Paper on Charges in Payment Systems (17 August 2022) defines it: "This is the charge recovered by the acquirer from the final recipient of money (i.e., merchant). It is levied as a discount to the transaction amount and usually recovered during settlement of the payment transaction." The acquirer shares it with the card issuer (as interchange) and the card network under the network's rules, and with any intermediary under their agreement.

A merchant agreement may also charge a monthly rent for the machine, a minimum-usage fee or a set-up fee. Those are commercial terms, not MDR, and no RBI cap applies to them. Ask for them in writing.

What is the MDR cap on debit cards?

RBI circular RBI/2017-18/105, DPSS.CO.PD No. 1633/02.14.003/2017-18, "Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions", 6 December 2017, effective 1 January 2018, sets these maximums.

These are ceilings, not fixed rates. RBI's 2022 paper says prescribing a maximum "would enable market discovery of ideal rates". The turnover test is the clinic's, so a clinic with gross receipts above ₹20 lakh last year falls in the second row unless the bank classifies it otherwise. Ask the bank which row it has put you in.

Illustration only, using the caps: a ₹1,000 bill on a non-RuPay debit card at a small merchant can cost up to 0.40%, which is ₹4. At an "other" merchant the same bill can cost up to ₹9. A ₹50,000 procedure bill at an "other" merchant can cost up to ₹450, below the ₹1,000 cap.

Is there zero MDR on RuPay cards?

On RuPay debit cards, yes. A PIB backgrounder of 24 March 2025 says: "Since January 2020, to promote digital transactions, MDR has been made zero for RuPay Debit Card and BHIM-UPI transactions through amendments in Section 10A of the Payments and Settlement Systems Act, 2007 and Section 269SU of the Income-tax Act, 1961." RBI's 2022 paper records that the CBDT notified RuPay debit cards and UPI as the prescribed modes and that zero charges took effect on 1 January 2020.

In 2026 the Government moved to amend section 10A, and the Ministry of Finance's release of 15 September 2026 set out MDR on UPI merchant payments above ₹2,000 (see our post on the clinic bank account and UPI QR). The releases we read do not say whether RuPay debit card payments stay at zero MDR. Ask your bank in writing.

What about credit cards?

RBI's 2022 paper says: "RBI has not issued any regulatory mandate or intervened on MDR for credit card transactions." The rate is whatever your agreement with the acquiring bank says, and it is usually higher than debit because the issuer is extending credit. This is the line most worth comparing between banks.

Can the clinic add the card charge to the patient's bill?

Not on debit cards. The 2017 circular says banks should ensure that merchants on-boarded by them "do not pass on MDR charges to customers while accepting payments through debit cards". RBI's 2022 paper notes that the same has not been mandated for credit cards, and describes adding a charge by payment mode as "surcharging". Your merchant agreement may have its own clause on it. Read it before adding any charge, and at most clinics a flat fee that does not change with the mode of payment is simpler for patients.

What should you ask the bank?

1. Which merchant category have you placed the clinic in for debit cards, and what MDR will you charge on non-RuPay debit, RuPay debit and credit cards?
2. Is there a separate rate for international or corporate cards?
3. What is the monthly machine rental, any minimum-usage charge, and the one-time set-up fee?
4. When does settlement reach the clinic account (same day, next day), and does it arrive gross or net of MDR?
5. Will the settlement report show the MDR and any other deduction per transaction, so the CA can book them?
6. How are refunds and chargebacks handled, and what documents will you ask the clinic for?
7. What notice will you give before changing rates?

Large card payments also keep a clinic clear of the cash limit in section 186 of the Income-tax Act, 2025, covered in our post on the cash payment limit for doctors.