NPCI says 96% of UPI transactions fall below ₹2,000 MDR threshold
NPCI CEO Dilip Asbe said 96% of UPI transactions are below ₹2,000 and 75% of merchant value is outside the MDR net. With 60 million unique merchants, he said digital acceptance can lift merchant sales by 25-30%, while low penetration and investment remain constraints.
What happened
NPCI CEO Dilip Asbe said most UPI transactions and merchant value remain outside the proposed MDR threshold. He cited low Indian UPI penetration and weak
Key facts
- 96% of UPI transactions are below ₹2,000
- 75% of overall UPI value is not charged
- 60 million unique merchants
- 75% of merchants have not received a transaction above ₹2,000
- Digital acceptance can raise merchant sales by 25-30%
- UPI returns may reach 3% per merchant
- Brazil has 90% adult penetration versus India's 35-40%
- Current-year UPI forecast: 10% value growth and 15-17% volume growth
Why this matters
Payment, POS, lending, and merchant-software players should target partnerships that monetize the 60 million-merchant acceptance base beyond transaction fees.
What to watch
- Any revision to government incentive funding for low-value UPI transactions or merchant acceptance infrastructure.
- NPCI, RBI or finance ministry consultation on MDR, interchange, merchant discount caps or differentiated pricing by merchant size and transaction value.
- Rising merchant fees for soundboxes, settlement acceleration, payment gateways, reconciliation or platform subscriptions.
- Acquirer consolidation, reduced QR servicing in smaller towns, or higher merchant onboarding and support costs.
- Growth in UPI credit, RuPay credit-card-on-UPI and high-value UPI transactions, which could create more viable fee pools.
- Evidence that merchants using digital acceptance are converting payment data into lending, loyalty or inventory-management adoption.
- Treat UPI QR acceptance as a traffic and conversion utility, not a standalone payments-cost problem, especially for low-ticket stores.
- Negotiate acquiring relationships around bundled economics: settlement speed, soundbox cost, dispute support, reconciliation quality and access to credit.
- Use UPI transaction data to identify repeat shoppers, peak payment periods and high-frequency baskets, then connect insights to loyalty and replenishment offers.
- Prepare for value-added-service pricing by calculating willingness to pay for faster settlement, automated reconciliation and embedded credit before providers repackage these capabilities.
- Maintain multi-rail acceptance for resilience and larger-ticket checkout, including cards, UPI credit options and payment links.