Proposed Payment Bill could revive MDR on large-value UPI merchant payments
Proposed changes to India’s payment law may enable merchant discount rates on select UPI transactions, with charges expected to focus on payments above ₹2,000. Such transactions account for a small share of UPI volumes but nearly 70% of transaction value, potentially opening a new revenue stream for banks and fintechs.
Proposed payment-law changes could allow MDR to return on select large-merchant UPI transactions, creating revenue for banks and fintechs. Analysts expect charges to target payments above ₹2,000, which represent low volumes but most UPI transaction value.
Why this matters
The proposal extends a recent UPI policy shift: India has proposed ending zero-MDR for UPI and enabling MDR on UPI and RuPay debit payments to large merchants.
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