LocalCircles estimates UPI transaction volumes could fall 4% and value 10% as consumers shift to cards, cash and bank transfers if merchants pass on the MDR
Clocks highest daily avg volume of over 800 mn transactions
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
Finance Minister Nirmala Sitharaman has said the charge on specified merchant transactions above ₹2,000 will be borne within the payments ecosystem, while UPI payments by customers will remain free
From October 15, MDR will apply to certain UPI payments above ₹2,000 made to large merchants, while customers and eligible small vendors will continue to pay no fee
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
A fee on UPI transactions is economically logical, but it reflects the govt's evolving approach to one of its key political constituencies
The benefits of keeping it free far outweigh the costs
Government may monitor merchants to ensure new UPI charges are not passed on to consumers from October 15
Brokers in discussion with the market regulator as the charge raises operational cost
New UPI charges on high-value merchant payments are raising concerns among Delhi retailers, with some considering a shift towards cash to protect margins
Petroleum dealers have sought exemption from MDR on UPI fuel purchases above Rs 2,000, warning that the additional transaction cost could put pressure on prescribed dealer margins
Finance Ministry rejects claims of US pressure behind UPI MDR, as Opposition parties and trader groups demand reconsideration of the new merchant fee
Distributors flag concerns over the new UPI merchant charges, while quick-commerce firms expect limited impact as most transactions remain below the Rs 2,000 threshold
LocalCircles survey finds 41% of merchants unwilling to bear any MDR on UPI payments above ₹2,000, while only 17% would accept a charge of 0.3% or more
A 2017 RBI rule barring merchants from passing debit card MDR to customers could guide safeguards against similar charges on UPI payments
UPI remains free for consumers and merchants, but the cost of running India's digital payment infrastructure has revived the debate over MDR, subsidies and platform fees
The government has not notified ₹2,000 as an MDR threshold, but the existing incentive framework and transaction data explain why the number dominates the debate