Croma weighs shifting card-led offers to UPI as new MDR raises retailer payment costs
With a 0.4% UPI MDR expected in 17 days, Tata Digital’s Croma is assessing a shift of card-linked offers and transactions toward lower-cost UPI. Organised and semi-organised retailers estimate the new charge could add ₹3,000-4,500 crore to annual payment costs.
The development
Organised and semi-organised retailers face an estimated ₹3,000-4,500 crore increase in annual payment costs as 0.4 per cent UPI MDR nears. Tata Digital’s Croma is considering shifting card-led offers and transactions to lower-cost UPI.
The numbers
- 17 days
- 0.4 per cent
- ₹3,000-4,500 crore
- 1.5 per cent
- 3 per cent
- 2026
- ₹19,000-20,000 crore
- 25-30 per cent
- 55-60 per cent
- 10-15 basis points
Why it matters to operators and investors
Retailers and payment partners have an opening to renegotiate acquiring, co-branded card and wallet economics as merchants seek lower-cost alternatives to both card and newly charged UPI transactions.
What to watch next
- Final notification, effective date and scope of the proposed 0.4% UPI MDR.
- Whether MDR applies uniformly across merchant size, transaction value, online payments and person-to-merchant QR transactions.
- Croma, Reliance Digital, Vijay Sales and e-commerce marketplaces changing their payment-offer terms.
- Changes in card share, UPI share and average ticket size in consumer-electronics transactions after rollout.
- Bank announcements on UPI-linked credit products, merchant-funded rewards and card-offer budgets.
- Retail-industry lobbying for exemptions, caps or tax treatment of payment acceptance costs.
- Croma tests UPI-only or UPI-first checkout offers, QR-led cashback and payment-page nudges in stores and online.
- Retailers renegotiate acquiring rates and seek volume-based MDR concessions from banks, payment aggregators and UPI apps.
- Card issuers and banks increase co-funded instant discounts, EMI subsidies and rewards to protect high-value electronics spend.
- Retailers tighten eligibility for card offers, particularly on low-margin smartphones, accessories and sale-period inventory.
- Payment aggregators package routing analytics, dynamic payment prompts and lower-cost merchant acceptance bundles.
- Large retailers may introduce small differences in promotional value by payment rail rather than explicit payment surcharges.
The counter-case
The premise may overstate both the imminence and the economic impact of a 0.4% UPI MDR. Payment-routing changes are operationally complex, and Croma may be reluctant to weaken card-linked EMI, cashback and bank-funded offers that are important conversion tools for high-ticket electronics. Even if UPI becomes relatively cheaper than cards, retailers could absorb part of the charge, renegotiate acquirer rates, introduce minimum-ticket thresholds, or pass costs through selectively rather than materially redirecting customer behavior. A broad shift could also reduce access to credit-led purchases and lower average order values.