Neutral impactEconomy
UPI MDR: Where will 0.4% fee go? FM clarifies banks, payment gateways & apps to get a share | Check breakdown
Mint 1 hr ago·25 Sept 2026, 12:44 pm
The government has introduced a 0.4% Merchant Discount Rate (MDR) charge for UPI transactions, a move that has sparked debate over who ultimately bears the cost. Finance Minister Nirmala Sitharaman clarified that this fee will not be passed entirely to customers. Instead, the revenue will be split among the various stakeholders involved in the transaction process.
The new fee structure allocates 40% of the revenue to the customer's bank, 30% to the payment gateway, and 20% to the UPI apps. This distribution aims to ensure that banks, fintech companies, and payment processors share the financial burden, rather than placing the entire load on merchants or consumers.
For investors, this development signals a potential shift in the revenue models of major banking and fintech entities. While the immediate impact on individual stocks may vary, the move could influence the profitability of banks and digital payment platforms in the long run. Market participants should monitor how these companies adapt their business strategies to the new fee structure.
Excerpt from Mint
UPI MDR explained: 40% of the new fee will go to customer banks, 30% to payment gateways and 20% to UPI apps. Know who gets the money. The new Merchant Discount Rate (MDR) on specified UPI transactions is set to create a new revenue stream for the digital payments ecosystem, with the money collected from merchants to…Read the original at Mint
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update worth tracking. Use the price and stock snapshot to gauge how the market is responding.
