'To strengthen UPI's long-term sustainability': RBI backs 0.4% MDR on transactions above Rs 2,000
Times of India 2 hrs ago·16 Sept 2026, 4:55 am
The Reserve Bank of India (RBI) has decided to maintain a 0.4% Merchant Discount Rate (MDR) on UPI transactions above Rs 2,000. This rate was previously set to expire on September 30, and the central bank's decision to extend it aims to ensure the long-term financial viability of the Unified Payments Interface (UPI).
For investors, this move is significant as it supports the continued growth of India's digital payment ecosystem. By keeping these charges, the RBI helps cover the operational costs for merchants and banks, which is crucial for maintaining a seamless and efficient payment infrastructure. This stability is a positive signal for the broader financial sector.
Investors should watch for how this policy impacts the profitability of fintech companies and payment aggregators. A sustainable UPI system encourages higher transaction volumes, which benefits the entire digital payments value chain. Keeping an eye on the adoption rates and the operational efficiency of these players will be key.
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