Archive · 16 Sep 2026
MobiKwik, PhonePe Founders Back New UPI MDR Charge
Some payment companies support charging a small fee on certain large UPI payments.
They say running the payment system costs money.
The extra revenue could help banks and payment companies pay those costs.
Payments between family members and friends are expected to stay free.
Small purchases, such as bread and vegetables, are also expected to remain free.
Larger purchases, such as flight tickets or expensive goods, may receive the charge.
The companies say this could help UPI keep growing.
UPI is operated by the National Payments Corporation of India and has expanded to several countries.
MobiKwik and PhonePe founders support introducing MDR on UPI transactions above ₹2,000.
They said the revenue could help banks and payment companies recover infrastructure and operational costs.
Person-to-person payments and small everyday purchases such as groceries are expected to remain free.
Higher-value transactions, including flight bookings, Amazon shopping and expensive mall purchases, may attract the charge.
UPI transaction value reportedly rose from ₹0.07 lakh crore in financial year 2017 to about ₹314 lakh crore in financial year 2026.
- Who
- MobiKwik and PhonePe founders, along with banks and payment companies, support the change.
- What
- A limited Merchant Discount Rate charge is being introduced for certain UPI transactions above ₹2,000.
- Where
- India, within the UPI payments system.
- Why
- Supporters say the revenue will help recover the costs of operating and expanding UPI infrastructure.
- Threshold
- The proposed MDR applies to certain UPI transactions above ₹2,000.
- Exempt payments
- Person-to-person payments and small everyday purchases are described as remaining free.
- Examples of charged payments
- Flight bookings, Amazon purchases and expensive mall purchases are cited as examples.
- Industry rationale
- Supporters say payment companies and banks have been absorbing substantial operational losses.
- UPI operator
- UPI is operated by the National Payments Corporation of India, an initiative of the Reserve Bank of India and the Indian Banks' Association.
- International reach
- UPI is accepted in 11 countries, including Singapore, the United Arab Emirates, France and Greece.
- Transaction growth
- UPI transaction value reportedly increased from ₹0.07 lakh crore in financial year 2017 to around ₹314 lakh crore in financial year 2026.