India opens door to UPI merchant fees, putting large retailers in focus
Proposed payments-law changes could allow a 0.3%-0.5% merchant discount rate on UPI for larger merchants or transactions above Rs 2,000. Fee levels and applicability remain undecided, but the shift could create a Rs 50 billion-Rs 100 billion industry revenue pool.
India tabled payments-law changes that could enable merchant fees on UPI. Policymakers are considering a 0.3%-0.5% MDR for larger merchants or transactions above Rs 2,000, potentially creating Rs 50-100 billion in industry revenue.
Why this matters
The proposal follows UPI’s record ₹29.9 lakh crore July value and 23.66 billion July transactions, while a survey found 53% may avoid UPI payments above ₹3,000 if MDR returns.
Retail-company signals are accelerating, up +202600% QoQ.