NPCI

UPI processed an average 802 million transactions a day in September, up about 1 per cent from August, while transaction value also remained firm despite the MDR backlash

18% GST on merchant discount rate could be reviewed

PhonePe, Paytm, Pine Labs and MobiKwik are stepping up merchant acquisition and device deployment as UPI MDR returns and NPCI plans a Rs 3,000-crore fund

UPI's costs could be shared more widely without distorting the incentives to use digital payments

Proposed UPI MDR will give remitter banks the largest revenue share, while private banks dominate the merchant-side transactions

An SBI official says the UPI merchant discount rate could cover the bank's transaction costs and leave a small surplus, while merchants may split payments to avoid the fee

Government may monitor merchants to ensure new UPI charges are not passed on to consumers from October 15

UPI apps say their Rs 1 share from a Rs 5 MDR on larger bill payments will not cover Bharat Bill Payment System commissions, while smaller transactions earn nothing at all

The finance ministry on Wednesday clarified that there was no foreign influence behind the decision to impose 0.4 per cent Merchant Discount Rate on UPI transactions above Rs 2,000. The clarification follows accusations by some Opposition parties, including the Congress, that the government succumbed to US pressure in taking the decision to impose the Merchant Discount Rate (MDR). "Some claims suggest the change is due to foreign influence. This is false. India's UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem," the finance ministry said in a post on X. Since its launch in 2016, UPI has grown into the world's largest real-time interoperable payment system - entirely on India's own terms, it said. UPI processed 24.5 billion transactions in August 2026 alone. To keep this system self-sustainable, secure and innovative, a small fee on high-value merchant transactions helps fund better

Sources stress MDR is not a tax on UPI, since the fee is distributed among participants in the payments chain rather than accruing to the government

The consultations ‌come after India changed its payments legislation on Monday, allowing firms to charge transactions of more than ₹2,000

The focus is on user protection, mapping actual risks from potential liabilities when agents go rogue, and governance standards around evolving technologies like these

The platforms are designed to use AI to automate enterprise workflows and processes across India's digital payments ecosystem

Transaction volumes rose 3.6 per cent month-on-month and 22 per cent year-on-year, while average daily UPI transactions increased to 791 million

The demand is likely to draw resistance, as payment aggregators are not direct members of the UPI network run by the NPCI

Moved ahead of players such as Cred, Amazon Pay

NPCI plans to use the country's vast diaspora to drive global expansion, while also exploring AI-enabled payments through platforms like ChatGPT and Gemini

The industry body said consumers and small merchants would remain protected from charges, while any merchant service fees would be commercial arrangements with payment providers

Potential UPI MDR could boost revenues for dominant players like PhonePe and Paytm, while giving smaller apps a viable path to profitability and customer acquisition

The Lok Sabha's tax amendment Bill opens the door for future UPI merchant charges, reigniting the debate on funding India's fast-growing digital payments ecosystem