Accepting digital payments: what to check first

Customers increasingly expect to pay by UPI or card, and many small businesses now take payments through QR codes, apps, machines and payment links. Accepting digital payments can reduce cash handling and make records easier. It also brings charges, rules and fraud risks that are not always obvious at the start. This guide lists what to check, and where to check it. It is general information, not financial or legal advice.

Begin by listing how your customers actually pay. A shop counter may need a QR code and perhaps a card machine. A home-based business may only need a QR code and bank transfers. A business that sells online needs a checkout, and that is a different matter from a counter QR.

Next, check what each option costs. Every method can involve different charges, and these change. The term to know is merchant discount rate, usually shortened to MDR, which is the fee a business pays for accepting a payment. Ask for every charge in writing: any setup fee, rental for a machine or soundbox, a percentage per transaction, and any fixed fee per transaction. Ask whether GST applies to the charges and what the settlement timeline is.

UPI charges deserve a current check, because they are changing. According to NPCI's FAQs dated 15 September 2026, an MDR of 0.4% applies from 15 October 2026 to person-to-merchant UPI payments above ₹2,000, capped at ₹300 for payments of ₹75,000 and above. The same document says payments up to ₹2,000 continue at zero MDR, and that small merchants receiving up to ₹1 lakh a month through UPI QR directly into their accounts continue at zero. It also says merchants cannot pass MDR on to customers, and that some categories, such as fuel and insurance, have a flat charge instead. Treat this as a dated summary rather than the last word. The details and their application may be clarified or revised, so read the current NPCI and RBI pages and ask your bank how your own account is classified.

Check who you are dealing with. If a provider collects online or in-person payments for you and passes the money on, in the RBI's regulatory framework it is a payment aggregator. The RBI issued consolidated directions for payment aggregators in September 2025, and it publishes lists of payment aggregators on its website. Before signing up, check that the provider appears there or is a bank, and read the agreement. Look at the settlement period, how refunds and disputes work, what happens if the provider holds your money, how long the contract runs and what leaving costs.

Be careful with card details. Since October 2022, RBI rules have stopped merchants and payment gateways from storing customers' full card details, and a saved card works through a token with the customer's consent. In practice, this means you should not collect or store card numbers, expiry dates or security codes yourself, whether in a notebook, on a phone or in a spreadsheet. Use an authorised gateway or provider and let them handle card data.

Now think about fraud, because it targets small businesses with a busy counter. Never accept a screen shown by the customer as proof of payment. Fake confirmation screens exist. Check your own bank app, SMS or the soundbox, and where possible wait for the money to show. Nobody needs to enter a PIN to receive money, so if a customer asks you to, or sends a request you did not expect, decline it. Be wary of a customer who pays too much and asks for the extra back. Keep QR codes where you can watch them, and check regularly that a sticker has not been replaced with another. Make sure counter staff know these rules too.

Keep your records straight. At the end of each day or week, match what the system says you received with what reached the bank. Look for missing payments, duplicates and entries you cannot explain, and do it while memory is fresh. Keep the settlement reports and bank statements. Leave tax treatment of receipts and charges to your accountant, and send them clean records.

Plan for refunds and problems before they happen. Decide who may approve a refund. Refund to the original payment method, and record each case. For a payment that was debited from a customer's account but not confirmed to you, ask for the transaction reference and check with your bank or provider rather than guessing. Know how to escalate if the provider does not resolve it.

Here is a short checklist.

Which payment methods do my customers really use?

Do I have every charge in writing, including settlement time and exit terms?

Have I read the current NPCI and RBI position on UPI charges?

Is my provider a bank or on the RBI list of authorised payment aggregators?

Am I avoiding storing any card details?

Do my staff check the bank or soundbox rather than the customer's screen?

Do I match payments to the bank statement every week?

Do I know how a refund or failed payment is handled?

Digital payments reward the owner who checks. Check the charge before you sign, check the money before you hand over goods, and check the rules before they change your bill.