Zero-MDR gave banks no return on UPI merchant onboarding costs: Ex-DFS secretary M. Nagaraju
The reassessment of the zero-MDR model was driven by the rapid increase in UPI transaction volumes and the widening gap between the cost of running the ecosystem and the government's support, says M. Nagaraju, former DFS secretary.
Former DFS secretary M. Nagaraju revealed that banks were experiencing no financial benefit from adopting the zero-merchant discount rate (MDR) policy for UPI merchant onboarding. According to Nagaraju, the costs incurred by banks for merchant verification, QR deployment, and customer support were not being offset by any returns from larger merchants participating in the program.
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