Proposed MDR framework could reopen UPI cost debate for larger retail transactions
A proposed amendment to India’s payment law could enable merchant discount rates on selected digital payments, including high-value UPI. The case for tiered charges centres on funding payment infrastructure while retaining zero-fee acceptance for low-ticket transactions and smaller merchants.
A proposed amendment to the Payment and Settlement Systems Act could let India levy MDR on selected digital payments, including high-value UPI transactions. The opinion argues tiered charges would fund payment infrastructure while preserving zero fees for low-value merchants and consumers.
Why this matters
The proposal extends a live UPI pricing debate: RBI has said no decision has been made on MDR for select UPI payments, while Bernstein projected 30–40 bps on high-value merchant transactions.
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