Reported UPI merchant fee unlikely to drive major digital-rupee uptake, S&P Global says
S&P Global expects limited digital-rupee adoption gains from the reported 0.40% MDR on UPI transactions above ₹2,000. It says UPI will remain India's dominant payment infrastructure, while separate-wallet requirements and lack of interest constrain CBDC adoption.
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Channel facts
| MDR effective date: | 15 अक्टूबर |
|---|---|
| FY2025-26 retail CBDC circulation: | ₹771.66 करोड़ |
| Previous FY retail CBDC circulation: | ₹1,016.46 करोड़ |
What it means for online and offline
Treat the reported fee as a potential merchant-margin headwind rather than a major payment-share catalyst, given S&P Global’s expectation that UPI will remain dominant.
Signals to track
- Official confirmation, revision or withdrawal of the reported October 15 fee
- Merchant payment-mix data showing a shift from UPI to the digital rupee
- Merchant announcements of digital-rupee checkout incentives
- Changes to separate-wallet requirements or interest on digital-rupee balances
The counter-case
Limited digital-rupee uptake is not assured. If the reported UPI fee takes effect and digital-rupee acceptance is cheaper, high-ticket merchants could steer customers through discounts or checkout prompts. Separate wallets and zero interest may matter less when shoppers fund wallets only at purchase. Adoption could therefore become material in selected retail categories even while UPI remains dominant overall.