What is a Merchant UPI Account? Charges, Benefits & How It Works

As India rapidly moves toward a cashless economy, digital payments have become essential for businesses of all sizes. One of the most powerful tools in this transformation is the merchant UPI account. But what exactly is it, and how can it benefit your business?

If you’ve been wondering “what is a merchant UPI account?” or “how to create a merchant UPI account?”, this blog breaks down everything you need to know—including registration, benefits, and potential charges.

What Is a Merchant UPI Account?

A merchant UPI account is a UPI-enabled payment setup specifically created for businesses to receive payments directly from customers. Unlike a personal UPI account used for peer-to-peer transactions, a merchant account is tailored for commercial transactions and may come with features like auto reconciliation, transaction tracking, and bulk settlements.

In simple terms, the UPI merchant account meaning refers to a payment identity (like store@bankname) that lets merchants accept UPI payments via QR code, payment link, or UPI ID.

How Merchant UPI Works

Here’s how a merchant UPI account operates:

1. The merchant registers with a UPI payment provider (like Paytm for Business, or a bank).
2. A unique merchant UPI ID and QR code are generated.
3. Customers scan the QR code or enter the UPI ID to make payments.
4. The amount is credited directly to the merchant’s linked bank account in real-time.
5. Merchants can view daily settlements, download reports, and raise disputes if needed.
   

This offers a seamless, secure, and 24×7 real-time payment solution to collect money from customers—both online and offline.

Merchant UPI Account Benefits

Here are some of the top advantages of UPI for merchants:

• Instant Payments: Real-time settlement directly into your bank account
• Zero Risk of Card Fraud: No card storage or sensitive data exposure
• Wide Customer Base: Accept payments from any UPI app like Paytm, etc.
• COD Alternative: Eliminates the hassle of cash on delivery and ATM runs
• QR and Link-Based Collection: Easy to display or share
• In-App Payment Capability: Ideal for e-commerce and app-based businesses
• Customer Trust: Seamless and secure single-click 2FA experience for customers

Whether you’re a small retailer, freelancer, or e-commerce seller, opening a UPI merchant account can significantly enhance your collection process.

UPI Merchant Account Charges

A common question is: “Is merchant UPI account free?”

Here’s the current status:

• UPI payments for merchants have been free for most use cases under current government and NPCI guidelines.
• Always check with your PSP (Payment Service Provider) for the latest UPI charges for merchants.

In most scenarios, there are no fees for receiving UPI payments directly into your bank account using QR or UPI ID.

How to Create a Merchant UPI Account

To open a UPI merchant account, follow these simple steps:

1. Download a UPI-enabled business app (e.g., Paytm for Business)
2. Register using your mobile number linked to your bank account
3. Submit KYC details such as PAN, Aadhaar, and business name
4. Generate your merchant UPI ID and QR code
5. Start accepting payments instantly via UPI

This completes your merchant UPI account registration, and you’re ready to go live.

Who Should Use a Merchant UPI Account?

• Local stores and retailers
• Online sellers and freelancers
• Service providers (salons, tuition, repair)
• Food delivery partners
• NGOs and donation platforms
• Mobile vendors and kirana shops

Whether you’re a small business owner or part of a growing digital brand, using a merchant UPI account adds professionalism, speeds up settlements, and removes payment friction.

How to Create Merchant UPI Account on Paytm For Business 

Follow these simple steps to get started:

Step 1: Download Paytm for Business.
Step 2: Enter your mobile number and verify.
Step 3: Set up the UPI account by linking the bank account as registered with your mobile number.
Step 4: Create your UPI PIN and generate UPI QR code.
Step 5: Display this QR code to accept payments, and track and manage transactions.  

That’s how you can open a UPI merchant account and accept UPI payments easily across India.