Positive impactSector
UPI MDR could add up to Rs 2,000 crore revenue for PhonePe, Rs 550 crore for Razorpay: Analysts
Economic Times 1 hr ago·24 Sept 2026, 2:57 am
The government recently increased the Merchant Discount Rate (MDR) on UPI transactions from 0.15% to 0.4%. This change creates a larger pool of revenue for payment gateways, which charge merchants a fee to process digital payments. Analysts estimate this new fee structure could generate an additional ₹18,000-22,000 crore in annual revenue for the UPI ecosystem.
For major players like PhonePe and Razorpay, this uptick in transaction volume and fee rates is expected to boost their earnings. Reports suggest PhonePe could see an extra ₹1,600-2,000 crore in annual revenue by FY28, while Razorpay might add ₹300-550 crore. This shift highlights the growing profitability of digital payments in India.
Investors should monitor how these companies utilize this additional capital. Key areas to watch include their marketing spend, technology upgrades, and efforts to expand their user base. The ability to convert this revenue into sustained growth will be crucial for their long-term performance.
Key takeaways
- Category: Sector.
- AI reads the tone as positive (potentially bullish) for the stock.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update worth tracking. The tone is positive — historically associated with upward pressure, though not predictive. Use the price and stock snapshot to gauge how the market is responding.
