UPI MDR Burden on Consumers Likely to Be Limited - NPCI

The impact of the newly introduced Merchant Discount Rate (MDR) on consumers is likely to remain limited, National Payments Corporation of India (NPCI) Managing Director and CEO Dilip Asbe said. Speaking at the 13th SBI Banking & Economics Conclave 2026 in Mumbai, Asbe said 96% of UPI transactions by volume are below ₹2,000 and will remain outside the MDR framework. He added that around 75% of UPI transaction value is also expected to remain outside the charging framework.

Asbe said around 80% of MDR collections are expected to come from businesses with annual turnover of more than ₹1,000 crore. These large companies already accepting credit card payments are likely to absorb the UPI-related costs, he said. Of the roughly 60 million digital-payment-accepting merchants, around 75% have never recorded a UPI transaction above ₹2,000. Asbe also said part of the MDR revenue would be used to strengthen the digital payments ecosystem, including payment infrastructure and soundboxes for small merchants.