Proposed UPI MDR could reshape merchant payments economics
A proposed merchant discount rate on higher-value UPI transactions could give fintechs a recurring revenue stream and shift competition toward merchant services. Smaller merchants may be exempt, while the Centre and RBI finalise policy and operating rules.
A proposed MDR on high-value UPI merchant transactions could create sustainable revenue for Indian payment firms, shifting competition toward merchant servicing while exempting smaller merchants. The Centre will decide policy, with RBI expected to frame operating rules.
Why this matters
UPI's proposed MDR follows recent signals that RBI sees sustainable funding as necessary, India is weighing fees on high-value payments, and zero-fee UPI remains in place while policy discussions continue.
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