SBI expects surplus from new UPI MDR as issuing, acquiring bank
State Bank of India will start charging a merchant discount rate on UPI payments exceeding Rs 2,000 from October 15. The bank anticipates generating surplus revenue due to its extensive card issuing and payment gateway services. Initially, MDR fees will be divided among issuing and acquiring banks, payment gateways, and UPI applications. SBI is evaluating the potential impact of transaction…
The State Bank of India (SBI) anticipates surplus revenue from new merchant discount rate (MDR) charges that will take effect on October 15, 2026. SBI, as one of the largest card issuing banks, will receive 40 basis points of the value, while also benefiting from its payment gateway and UPI presence. The new MDR of 0.4% on transactions over Rs 2,000 is a first for UPI payments since 2020.
The charges will be split between the issuing bank, acquiring bank, payment gateways, and UPI applications. SBI, being both an issuing and acquiring bank, is expected to generate a significant portion of the revenue. However, the bank is still assessing the implications of the MDR and considering factors like transaction splitting and system pressure.
The bank has received $10 billion from FCNR (B) inflows and annually generates Rs 5.5 lakh crore from normal deposits, suggesting that the additional Rs 90,000 crore should not pose a problem.
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- SBI expects surplus from new UPI MDR charges economictimes.indiatimes.com
