Proposed UPI MDR could squeeze merchant margins, slow retail digital payments
Experts warn that introducing a merchant discount rate on UPI would raise costs for Indian retailers, hitting kirana stores hardest. The move could shrink consumer discounts, dent margins and stall digital payment adoption across the retail sector.
Experts warn a proposed merchant discount rate on UPI could raise costs for Indian merchants, especially kirana stores, squeezing margins, reducing consumer discounts and slowing digital payment adoption across retail.
Why this matters
Follows renewed payment-industry lobbying to revive MDR on high-value UPI transactions above ₹2,000, with the Centre weighing rates of 5-7 basis points to 0.5% for large merchants.
Retail-company signals accelerating, up 881300% QoQ.