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UPI MDR: Nilesh Shah says none below Rs 2,000 for now, but UPI needs funding and some charge may come
Nilesh Shah, a member of the PM's Economic Advisory Council, said the government has stated there is no MDR on UPI transactions below Rs 2,000. He added that UPI needs funding and users may eventually have to pay some MDR. He also expects around 7% growth this year.
What it means for online and offline
Keep UPI as a zero-cost checkout rail for sub-Rs 2,000 baskets today, but model a possible MDR on larger tickets and work out what you would pass on, absorb or steer toward cheaper tender types.
Signals to track
- Any ministry or NPCI circular or consultation paper on UPI fees, MDR or interchange
- Budget or subsidy allocations for UPI incentives being cut or restructured
- Payment app or bank earnings commentary on UPI profitability and MDR expectations
- Retail and merchant association statements on absorbing or passing on payment costs
- Oil-price-driven changes to the roughly 7% growth outlook that tighten fiscal room for subsidies
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- The finance ministry is likely to keep restating the no-MDR position for transactions below Rs 2,000 while leaving room for a future funding mechanism.
- Banks and UPI payment apps are likely to keep lobbying for a revenue model, citing the cost of running the rails.
- Large retailers and merchant groups may push back early against any charge, and small merchants may warn of a shift back to cash.
- NPCI may float consultation papers or tiered-fee ideas rather than a flat MDR, keeping small-ticket payments free.
- Policymakers are likely to lean on the roughly 7% growth outlook to argue the economy can absorb a gradual, phased approach to funding.
The source
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