UPI Processes ₹314 Lakh Cr Transactions in FY 2025-26, India Leads Global Real-Time Payments at 49% Share

UPI Completes 10 Years: 66 Cr Daily Transactions, 49% Global Volume, Challenges of Monetisation & Next Frontiers

UPI's 10th anniversary highlights its dominance in global real-time payment volume (49%) but not in value, as low-value retail payments dominate. The key challenges ahead are monetisation of the zero-MDR model, expanding into high-value transactions, and integrating with tax compliance to drive digital economy growth.

Govt Proposes 0.25-0.5% MDR on UPI Transactions Above ₹2,000 via PSS Act Amendment

The government has proposed allowing a Merchant Discount Rate (MDR) of 0.25-0.5% on UPI transactions above ₹2,000 via an amendment to Section 10A of the Payment and Settlement Systems Act, 2007. This reverses a decade-long zero-MDR policy, potentially undermining financial inclusion, formalisation, and investment in UPI infrastructure. While only 5% of transactions by volume are affected, they account for 65% of transaction value, making this a significant policy shift.

UPI@10 Years: 86% of Digital Transactions, Government Allows Merchant Fees Under PSS Act Amendment

UPI completes 10 years with 86% of India's digital transactions, but the zero-MDR model is ending. The government has amended the PSS Act to allow merchant fees, aiming to fund the next growth phase in rural areas and cross-border payments. Key challenge: balancing inclusion with sustainability.

Taxation Bill 2026 Allows MDR on UPI & RuPay; 23.6 Bn UPI Transactions in July

The Taxation and Other Laws (Amendment) Bill, 2026, passed in Lok Sabha, paves the way for reintroducing MDR on UPI and RuPay debit card transactions. This shifts India's digital payments policy from zero-MDR to a sustainable fee model, impacting 23.6 billion monthly UPI transactions and the largely duopolistic market of PhonePe and Google Pay.

RBI Introduces 0.4% MDR on UPI Transactions Above ₹2,000 for Merchants from Oct 15, 2026

Ending nearly six years of zero-MDR UPI, the government introduces a 0.4% fee on merchant transactions above ₹2,000 from October 15, 2026. This shift aims to ensure long-term sustainability of India's digital payments ecosystem. Importantly, all person-to-person (P2P) and small merchant payments (below ₹2,000) remain free for users.

NPCI Allows 0.4% MDR on UPI Payments Above ₹2,000 from October 15, 2026

NPCI has announced a new MDR (Merchant Discount Rate) structure for UPI payments effective October 15, 2026. Mid-to-large merchants receiving payments above ₹2,000 per transaction will be charged 0.4% MDR, while over 97% of UPI transactions by volume remain free. This marks a major shift in India's digital payments ecosystem and has significant implications for banks, payment apps, and merchants.

NPCI Imposes 0.4% MDR on UPI P2M Transactions Above Rs 2,000 from Oct 15, 2026

UPI transactions above Rs 2,000 will now attract a 0.4% Merchant Discount Rate (MDR, capped at Rs 300) from October 15, 2026, for person-to-merchant (P2M) payments. This reverses the zero-MDR policy adopted in 2020, aiming to make the UPI ecosystem financially sustainable. Over 95% of transactions remain unaffected, and critical services like rail tickets and utility bills have a flat Rs 5 fee.

Global Agencies Upgrade India GDP Forecast to ~7%, RBI May Hike Repo Rate 25 bps as Inflation Pressures Build

Multiple global agencies (ADB, S&P, OECD, Moody's) have raised India's FY26 growth forecast to around 7%, driven by strong IIP, capex, and exports. However, inflation is expected to average 5.1% and the RBI may raise its policy rate by 25 bps, with farm sector risks from El Niño adding to uncertainty.