On this page · 7 sections
- The 4 ways a retail shop can collect UPI
- What UPI actually costs a retailer in 2026
- How to set it up in one afternoon
- Reconciling UPI without a headache
- Avoiding fake-payment scams at the counter
- Frequently asked questions
- Bottom line
Updated 18 October 2026 · By Ashok Sachdev
To accept UPI payments in your retail shop, display a verified UPI QR code (from your bank or a PSP app like PhonePe, Google Pay, Paytm or BharatPe) at the counter, or generate a dynamic QR from your billing software for the exact bill amount. Customers scan, pay, and the money lands in your linked bank account instantly. Today most shops pay no fee (MDR) on bank-account UPI. Under the framework announced on 15 September 2026, merchant payments up to ₹2,000 stay free and a 0.4% MDR will apply above ₹2,000 once NPCI notifies the start date, which it says will be after Diwali.
The 4 ways a retail shop can collect UPI
| Method | How it works | Best for | Cost to you |
|---|
| Static QR sticker | One printed QR at the counter; customer types the amount | Smallest shops, single counter | No MDR today (see below) |
| Dynamic QR from POS | Billing software shows a QR pre-filled with the exact bill total | Shops that want zero wrong-amount disputes | No MDR today (see below) |
| Soundbox | Speaker announces "received ₹250" out loud on each payment | Busy counters, staff who can't watch the phone | Small monthly rental |
| UPI on POS / smart terminal | Card machine also shows a UPI QR per bill | Shops already taking cards | Terminal rental / MDR on cards only |
What UPI actually costs a retailer in 2026
Right now bank-account UPI is free for most shops, but that is changing. The Government's new UPI framework (PIB, 15 September 2026) keeps merchant (P2M) payments up to ₹2,000 free and sets a 0.4% MDR on merchant payments above ₹2,000. On 13 October 2026 NPCI said this MDR will start after Diwali, on a date it will notify separately.
- Payments up to ₹2,000: no MDR.
- Small merchants on a P2PM QR (person-to-person-merchant) receiving up to ₹1 lakh a month: zero MDR on all payments.
- Above ₹2,000, once in force: 0.4%, capped at ₹300 a payment from ₹75,000. Essential sectors such as fuel, telecom, insurance and railways pay a flat ₹5.
- Customers do not pay MDR. Banks have been told to make sure merchants do not pass it on.
- UPI paid from a prepaid wallet (PPI): since April 2023, NPCI allows an interchange of up to 1.1% on wallet-funded merchant payments above ₹2,000. It is settled on the merchant side, not charged to the customer. Ask your PSP whether it passes this on to you.
For most bills up to ₹2,000, bank-account UPI stays free, which is why it beats cards for everyday small bills. For large bills, compare the UPI MDR with your card rate once your PSP confirms both.
How to set it up in one afternoon
- Pick where money should land. Use your shop's current account (or the account your GST registration uses), not a personal savings account.
- Get a merchant QR. Open PhonePe Business, Google Pay for Business, Paytm for Business or BharatPe, complete KYC with PAN + bank proof, and download your QR.
- Place the QR at eye level at the counter, and keep a backup on your phone.
- Turn on payment alerts (app notification or a soundbox) so staff confirm receipt before handing over goods.
- Reconcile daily. Match the day's UPI credits against your billing software totals so nothing slips.
Reconciling UPI without a headache
Bill first, then collect, and mark every bill as UPI, cash or card so the day-end UPI total can be matched with your bank statement. Step-by-step: how to match UPI payments with your bills every day.
RichPOS records cash, card, UPI and split payments on every bill, can print your shop's UPI QR on the invoice, and shows UPI and cash separately at day close.
Avoiding fake-payment scams at the counter
A common trick is a customer showing a "payment successful" screenshot that never actually sent money. Protect the shop:
- Trust the credit in your own app or soundbox, never the customer's screen.
- Match the amount and the last digits of the UPI reference before releasing goods.
- For large-value sales, wait for the bank SMS credit, not just the app toast.
Related guides: Daily UPI payment reconciliation; रोज़ का प्रॉफ़िट-लॉस हिसाब; उधार रिमाइंडर मैसेज; Free profit and loss calculator; Cash transaction limits for shops.
Bottom line
Put a verified QR at the counter, record the payment mode on every bill and match UPI totals with the bank every evening. To do it from one screen, try the RichPOS free trial for 30 days, no card needed.
Sources: PIB, 15 September 2026 (UPI MDR framework); NPCI, 13 October 2026 (MDR to start after Diwali); PIB backgrounder, September 2025 (₹10 lakh a day for select categories); All India Radio News (P2P stays ₹1 lakh a day); NPCI's March 2023 PPI interchange clarification, as reported by The Week. Checked 22 October 2026; MDR start date still to be notified by NPCI.
FAQ
Frequently asked questions
Do I need GST registration to accept UPI in my shop?
No. Any shop can accept UPI with a merchant QR after basic KYC. GST registration is a separate requirement based on your turnover, not on how you get paid. But your UPI current account should match the details you use for GST if you are registered.
Is there a limit on how much I can receive by UPI in a day?
Limits are set by NPCI and your bank. Daily limits generally range from ₹1 lakh to ₹5 lakh depending on the category, and since 15 September 2025 select verified merchant categories can receive up to ₹10 lakh a day. Person-to-person transfers stay at ₹1 lakh a day. Check your merchant limit with your bank or PSP so a big sale doesn't get blocked.
Does UPI money reach my account instantly?
Yes. P2M UPI credits your linked bank account in real time, 24x7, including holidays. This is a key advantage over cards, which typically settle the next working day.
Can I take UPI and print a GST invoice on the same bill?
Yes. Record the payment mode as UPI on the invoice in your billing software and print the GST tax invoice as usual. The payment method has no effect on the tax fields.
How do I record UPI payments in my billing software?
Choose UPI as the payment mode on each bill, or split one bill between cash and UPI. The day-close report then shows the UPI total to match with your bank statement. RichPOS accepts cash, card, UPI and split payments on every bill. To ask for pending payments by UPI, use the free
udhaar reminder message maker.
ASWritten by Ashok SachdevFounder, RichPOS Software, Ahmedabad. We build RichPOS for Indian shops and write these guides from what shop owners ask us every day. Facts on tax rates and prices are dated; confirm GST matters with your CA. Questions? WhatsApp us.
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