1 week ago
Selective UPI MDR Could Generate Rs 30,000 Crore Revenue
India’s UPI payment system is growing very quickly.
A report says some larger merchant payments could eventually include a small fee.
This fee is called Merchant Discount Rate, or MDR.
The suggested fee would be between 0.25% and 0.50% for selected transactions.
Consumers and payments between people would stay free.
The report estimates this could create Rs 15,000–30,000 crore in gross revenue.
The money would help support the payment system, but it is not yet clear how it would be shared.
It is also uncertain whether merchants would agree to pay the fee.
CareEdge Ratings estimated a gross revenue opportunity of Rs 15,000–30,000 crore from selective UPI MDR.
The estimate assumes a 0.25%–0.50% MDR on certain higher-value merchant transactions.
Consumers and person-to-person payments would remain free under the proposed approach.
The potentially MDR-addressable pool is projected at Rs 61.13 lakh crore in FY26.
CareEdge said UPI processed nearly 2,400 crore transactions in one month, highlighting the need for ecosystem sustainability.
- Who
- CareEdge Ratings and CareEdge Advisory analyzed the potential change, involving banks, merchants and the UPI ecosystem.
- What
- A selective MDR on certain higher-value UPI merchant payments could create Rs 15,000–30,000 crore in gross revenue.
- Where
- India’s Unified Payments Interface ecosystem.
- When
- The report was cited on Tuesday; its projections refer to FY26, July 2026 volumes and Q1FY27 payment data.
- Why
- The proposal is intended to improve the long-term sustainability of UPI’s payment infrastructure as transaction volumes expand.
Key facts
- Estimated revenue opportunity
- Rs 15,000–30,000 crore in gross revenue
- Potential MDR rate
- 0.25%–0.50% on selected higher-value merchant transactions
- MDR-addressable pool
- Rs 61.13 lakh crore projected for FY26
- Consumer impact
- Consumers and P2P payments would remain free under the proposal
- UPI scale
- Nearly 2,400 crore transactions in a single month
- Banks live on UPI
- 741 banks
- July 2026 volume and value
- More than 22 billion transactions worth around Rs 29.87 lakh crore
Quotes
Kalpesh Mantri
Assistant Director at CareEdge Advisory
“With UPI processing nearly 2,400 crore transactions in a single month, the ecosystem has reached a scale where sustainability of the underlying payment infrastructure is becoming as important as transaction growth”
thehansindia.com
“With 741 banks live on UPI and monthly volumes exceeding 22 billion transactions, amounting to around Rs 29.87 lakh crore in July 2026, India’s UPI ecosystem has achieved remarkable scale and depth”
thehansindia.com
