Wire · technology
Don't put a toll on UPI: Why merchant discount rate isn't the answer
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Fusion42 · 20 July 2026 · Fusion42 review
India's government is considering introducing a merchant discount rate (MDR) on UPI payments for businesses with ₹1-1.5 crore turnover on transactions above ₹2,000, but policy experts argue this would undermine the frictionless payment system and violate the Payment and Settlement Systems Act; they propose alternative funding mechanisms including independent cost studies, a sustainability fund, and optional value-added service charges instead.
This Wire brief sits within Fusion42's coverage of Fintech, and 45 sources have reported it between 19 Jul 2026 and 15 Oct 2026.
◆ ◆ The Wire takeaway
If you've built your checkout or payments infrastructure around zero-cost UPI, a threshold-based MDR would force you to rebuild billing logic and raise prices on customers earning ₹1-1.5 crore—or watch them fragment transactions to dodge fees. The statutory case against MDR is strong, but the cost pressure on RBI and banks is real; the policy fight is live.
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45 sources · first reported 19 Jul 2026 · latest 15 Oct 2026
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