NPCI CEO says UPI volumes should hold despite MDR debate; 10% of merchants may pass on costs

NPCI CEO Dilip Asbe said UPI transaction volumes and values are expected to remain resilient even if MDR is introduced. About 10% of merchants may pass charges to consumers, while NPCI plans credit-linked UPI expansion and agentic payments in the coming months.

— Source publishedThu, 24 Sept, 2026, 18:18 IST·First seen Thu, 24 Sept, 2026, 20:22 IST·Source NDTV Profit

What happened

National Payments Corporation of India (NPCI) · NPCI CEO Dilip Asbe expects UPI volumes and values to remain resilient despite MDR discussions, though about 10%

Key facts

  • Around 10% of merchants could pass UPI MDR costs to consumers
  • Approximately 75% of merchants do not receive transactions above Rs 2,000
  • Around 10% of merchants do not accept credit card payments
  • 96% of UPI transaction volumes carry zero charges

Why this matters

NPCI’s credit-linked UPI and agentic-payment roadmap creates partnership opportunities for retailers, lenders and payment platforms seeking to embed financing and automated checkout experiences.

What to watch

  • Formal government, RBI or NPCI guidance on MDR scope, rate caps, merchant-size exemptions and applicability to P2M versus P2P payments.
  • Merchant surcharge adoption rates, especially among small retailers, fuel stations, billers and online sellers.
  • UPI transaction growth and average ticket size after any pricing change, segmented by merchant category.
  • Rollout timing and adoption of credit-linked UPI products, including issuer participation and consumer credit-loss trends.
  • NPCI rules for agentic payments, including transaction mandates, authentication requirements, liability and fraud protections.
  • Competitive response from cards, wallets and cash-discount programs.
  • Model checkout-margin exposure for small merchants, franchisees and marketplace sellers if MDR is charged on UPI acceptance.
  • Track whether major retailers explicitly commit to absorbing charges; this would raise pressure on smaller competitors that cannot do the same.
  • Prepare credit-linked UPI offers, including installment, rewards and merchant-funded promotions, for categories where basket sizes can support financing.
  • Assess agentic-payment readiness: consent flows, payment limits, fraud controls, refunds, dispute handling and inventory-confirmation integrations.
  • Payment aggregators should bundle UPI acceptance with reconciliation, working-capital and loyalty tools to offset merchant sensitivity to transaction fees.