UPI processed ₹28.92 lakh crore in June without an explicit monetization model. After six years of zero-MDR, the Centre is weighing a fee for large transactions. This signals banks and payment aggregators might finally get paid for processing.
How We Got Here
UPI has operated under a zero-MDR regime for nearly six years, fueling its massive adoption across India. The Finance Ministry denied reintroducing charges last year, but specific new thresholds suggest real movement this time.
The Numbers
- The proposed MDR is 0.05% to 0.07%, targeting UPI transactions above ₹2,000.
- It applies to businesses with an annual turnover exceeding ₹1 crore to ₹1.5 crore.
- About 90% of UPI-accepting small and micro businesses would remain unaffected by the change.
- A key hurdle involves verifying merchant turnover, as no standardised mechanism exists currently.
What Happens Next
🇮🇳 Why This Matters for India
For fintech payment aggregators in Hyderabad and Pune, this could finally unblock sustainable revenue streams that allow deeper infrastructure investment.
The Take
The payments industry isn't worried about the 0.05% fee, which is tiny. It's about how NPCI plans to verify merchant turnover without creating a compliance nightmare.
Source:
Inc42 ↗