India reportedly moves to restore UPI merchant charges, reshaping payments economics
A proposed amendment to the Payment and Settlement Systems Act could reintroduce MDR on UPI transactions. Banks may be the biggest beneficiaries, while PhonePe and Google Pay could gain new revenue streams and merchants face higher digital-payment costs. No rate or rollout date has been announced.
India is reportedly preparing to amend the Payment and Settlement Systems Act to restore merchant charges on UPI. Banks, especially HDFC Bank, SBI and ICICI Bank, could benefit most; PhonePe and Google Pay may gain incremental revenue, while merchants face added payment costs.
Why this matters
The reported amendment extends recent signals on MDR for high-value UPI payments, including a potential 0.35% cap and a possible shift to cards for larger purchases.
Retail-company signals are accelerating, up 206014% QoQ.