MDR on UPI: The small fee that’s causing a big debate
Merchant discount rate (MDR) on UPI has sparked debate over how UPI can remain affordable for merchants while creating a revenue stream for the banks and payment companies that keep the network running.
The Unified Payments Interface (UPI) is set to introduce a 0.4% Merchant Discount Rate (MDR) for transactions exceeding Rs 2,000, effective October 15. This new fee is aimed at generating revenue to support UPI’s infrastructure, cybersecurity, and fraud prevention costs. The move has sparked debate among industry leaders, with concerns over who should bear the cost and how the revenue should be shared between banks, payment apps, and aggregators.
The announcement has impacted payment stocks, with Paytm shares jumping over 7% to a 52-week high, while One MobiKwik and Pine Labs saw initial gains before retreating.
Brief written by urgent.news from YourStory's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
