Finance Ministry weighs tiered MDR and subsidies phase-out for high-value UPI payments
BusinessLine 2 hrs ago·12 Aug 2026, 2:25 pm
The Finance Ministry is considering a major policy shift for the Unified Payments Interface (UPI). The proposal involves reintroducing Merchant Discount Rates (MDR) on high-value transactions and establishing a tiered incentive structure to gradually phase out government subsidies over the coming years.
This move is significant for the broader market as it signals a move towards a more sustainable digital payment ecosystem. While it may increase transaction costs for merchants on large payments, it aims to reduce the fiscal burden on the government and encourage more efficient usage of digital infrastructure.
Investors should watch for the official implementation timeline and the final structure of the MDR rates. A clear framework will be crucial for banks and fintech companies to adjust their business models accordingly.
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- Category: Economy.
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