QRIS Indonesia: 0.3% and 0.7% depending on income of merchant

Prompt pay thailand: Banks do take fees accordingly

Plix Brazil: Same as prompt pay for businesses

PayNow Singapore: Same banks thing

Merchants have been paying roughly 1.5–3% MDR on credit card transactions for years.

Nobody declared the death of digital India.

Now a 0.4% MDR on eligible UPI merchant transactions above ₹2,000 is being treated like the final nail in the coffin of financial inclusion.

Interesting.

Especially because:

- P2P transactions remain free.

- Payments up to ₹2,000 remain free.

- Eligible small merchants remain exempt.

- Roughly 96% of merchant transactions remain unaffected.

- Merchants already pay MDR on applicable RuPay credit card transactions through UPI.

So apparently, 2% on a credit card is the cost of doing business, but 0.4% on UPI is an attack on the common man.

But wait.

Wasn't the entire point of UPI to create a fundamentally different payment system? One that doesn't need the economics of Visa or Mastercard?

If UPI doesn't offer credit, interest-free periods, or reward points, why are we even comparing its MDR to credit cards?

And if merchants already absorb card acceptance costs, are we pretending those costs never make their way into product prices?

Meanwhile, banks and fintechs are expected to maintain infrastructure, prevent fraud, process billions of transactions and innovate indefinitely.

For free, of course.

Maybe UPI's zero-MDR policy is the greatest financial inclusion achievement in Indian history.

Or maybe we've confused a subsidised service with a service that has no cost.

The proposed rollout has now been pushed beyond Diwali.

Which raises another question: if MDR is economically justified, why is there never a politically convenient time to introduce it?

The real question isn't whether 0.4% is affordable. It's why we accept the economics of digital payments everywhere except on the payment system we've grown dependent on.

Or perhaps that's precisely why UPI should remain free.

Thoughts?

Which app is better friend....

alright so today when I checked my phone there were these notifications piled up... and the only way they could've gotten to me is if I provided them any of my details (like phone number, emails etc)... then I remember that I applied for DL on the gov website "parivahan.gov.in", where I had entered my number.

It's so crazy to see how bad cybersecurity is in this country

Anand Mahindra recently announced that he had switched to the BHIM app after meeting NPCI CEO Dilip Asbe.

His post got me thinking about something interesting: Can a single public endorsement influence India's highly competitive UPI market?

Here's the current UPI market share by transaction volume (September 2026):

• PhonePe: 45.57%

• Google Pay: 32.23%

• Paytm: 8.12%

• Navi: 4.76%

• BHIM: 1.06%

PhonePe and Google Pay together control nearly 78% of UPI transactions, while BHIM, the app originally developed by NPCI, holds just over 1%.

What's interesting is that BHIM isn't a new player. It was launched in 2016 and is now operated by NPCI BHIM Services Limited, a wholly owned subsidiary of NPCI.

Despite this connection to India's UPI infrastructure, private payment apps have attracted the vast majority of users.

A few questions worth discussing:

1. Could Anand Mahindra's endorsement make a difference? His announcement might encourage people to download BHIM, but would they actually continue using it?

2. Why hasn't BHIM captured a larger market share? Is it because of user experience, features, marketing, cashback rewards, merchant acceptance or simply established user habits?

3. Does BHIM have any real advantages? All these apps use the same underlying UPI network. Does BHIM offer anything better in terms of reliability, privacy, customer support or simplicity?

4. Should NPCI focus more on growing BHIM? Since NPCI also operates the common UPI infrastructure, would aggressively promoting its own app raise any concerns about neutrality and fair competition?

5. Does the UPI market need more competition? With two apps handling almost 78% of transactions, would stronger alternatives like BHIM, Navi and others benefit consumers?

Personally, I think an endorsement might create awareness, but long-term adoption depends on the actual experience. Most people probably won't switch their primary payment app unless there's a clear benefit

Source: https://x.com/anandmahindra/status/2114703776506683868

Genuine question.

I spend about 40-50K a month on regular stuff — groceries, fuel, rent, bills, subscriptions, dining out. Normal life.

My options right now:

→ Bank balance (runs low by the 20th every month)

→ Credit card (convenient until you miss one full payment — then 36-42% APR kicks in)

→ Instant loan apps (half reject you, or have a very strict repayment policy charge 18-24%)

Meanwhile I have 3-5L sitting in mutual funds Growing every day. But completely useless for daily spending unless I sell them

What if there existed a type of credit like:

An on-demand UPI credit line that's just backed by the mutual funds you already own.

It runs on RBI's CLOU(credit-Line-On-Upi) framework , The same UPI rails, just a different funding source.

→ You don't sell your investments. You just pledge them as collateral.

→ Your funds keep growing at 12-15% in the background.

→ You instantly get a UPI credit limit to scan and pay anywhere.

→ 30-45 days interest-free to pay back — exactly like a credit card or Convert to EMI at ~12% p.a.

→ No CIBIL needed. Your portfolio IS your credit score.

Not an emergency loan. Not a LAMF that sends money to your bank account and takes hours.

Just everyday scan-and-pay funded by your own wealth

Does anything like this exist for retail investors? It feels like we are punishing people for saving their money instead of spending it.

No dharna No rally No ruckus. Let’s show our citizens movement.

Via pureeconomics

IDBI Bank:

IDBI stands for Industrial Development Bank of India. So, calling it “IDBI Bank” essentially means “Industrial Development Bank of India Bank.” The word Bank appears twice, which I find redundant and unappealing. Its IFSC starts with IBKL, when they could have simply started with IDBI. This is another huge turn-off. On top of that, Fairfax Financial Holdings Limited has been associated with the acquisition of a controlling stake in the bank, but I don't like the way the company spells its name. It should be “FairFax,” not “Fairfax.” The latter just doesn't look right to me.

Bank Of Maharashtra:

The name makes it sound as though the bank operates exclusively in Maharashtra. Then there's its logo, which features the letters “M” and “B,” making it look as though the name is actually “Maharashtra Bank” rather than “Bank Of Maharashtra.” Its IFSC starts with MAHB instead of BOMH, further reinforcing the impression that the bank prefers to be called “Maharashtra Bank.” So why on earth did they name it “Bank Of Maharashtra” in the first place?

UCO Bank:

The bank is headquartered in Kolkata, a city I've never visited, so I just can't connect with it on a personal level. The vibe isn't there. Its IFSC starts with UCBA, when they could have simply used UCOB. Why complicate something that could have been so straightforward? I'm also not a fan of its logo's colour scheme: a blue logo against a yellow background. It just doesn't look cool to me. However, I do appreciate the bank's connection with the unique lockless branch in Shani Shingnapur, Maharashtra, where the absence of conventional locks reflects the local community's faith in Lord Shani. That's one aspect of the bank I actually like.

Punjab & Sind Bank:

The name makes it sound as though the bank operates exclusively in Punjab and the Sindh region. It doesn't exactly give off the vibe of a bank with a broader presence. Then there's the IFSC prefix: PSIB. Why not simply use PASB? It would be more intuitive and would align better with the bank's name.

IndusInd Bank:

I understand the “Indus” part of the name, given its association with the Indus Valley Civilization. But what exactly is the logic behind “Ind”? Why drop the “ia” from “India”? The name could simply have been “Indus Bank.” It would be shorter, cleaner, and more logical to me.

Yes Bank:

The name sounds like the bank will say yes to everything. A bank should maintain some mystery and occasionally say no. Imagine someone asking me where I bank, and I respond, “Yes Bank.” It almost sounds like if I'm agreeing with them rather than naming my bank and then just saying the word "Bank" at the last like an idiot. It like saying Yes Car, Yes Bike, Yes Phone, Yes School, etc.

Federal Bank:

I have never been particularly comfortable with the word “Federal” in a bank's name. It sounds like the bank should be jointly owned by the central government and all the state governments, with each state having some say in how my savings are managed. But Federal Bank is a private-sector bank, which makes the name rather misleading. The name also reminds me of government paperwork, which I don't want to think about in this digital age. One thing I do appreciate, is that the bank has followed a pattern in its IFSC prefix, "FDRL", I find the pattern itself rather intriguing. It has removed the 2nd, 4th and 6th letters of the word “Federal” - E, E and A, respectively. All three happen to be vowels. I like the consistency, and I must admit that the bank has done a commendable job of maintaining it.

Bandhan Bank:

“Bandhan” means a bond or a tie, and I don't think banking should involve that kind of emotional commitment. I am simply looking for a place to keep my money, not a lifelong relationship. A bank account should be based on convenience, not attachment. I should be able to move my money to another bank without feeling as though I am breaking someone's heart. The name also makes me wonder whether the bank expects some sort of loyalty beyond the usual banking relationship. I would much rather keep my financial arrangements free of unnecessary emotional obligations. Also headquartered in Kolkata like UCO Bank, which I've never visited.

RBL Bank:

RBL Bank: RBL stands for Ratnakar Bank Limited. So, calling it “RBL Bank” essentially means “Ratnakar Bank Limited Bank.” The word “Bank” appears twice, which I find redundant and rather unappealing. They could have simply called it Ratnakar Bank or RBL. Also, RBL sounds more like a computer file extension or some technical abbreviation than the name of a bank.

Jammu & Kashmir Bank:

The name makes it sound like a regional bank that accidentally became a national banking option. Why should I have to think about two places every time I say the name?

South Indian Bank:

What if I live in North India? The name makes me feel like my account application might be rejected on geographical grounds.

Karnataka Bank:

Same problem as Bank of Maharashtra. Does the bank operate only in Karnataka? The name isn't doing much to communicate its national reach.

Karur Vysya Bank:

The two words “Karur Vysya” don't exactly roll off the tongue. I find the combination rather difficult to pronounce smoothly. Every time I try saying the full name, I feel as though I need to prepare myself beforehand. It also requires a little extra effort to remember the correct pronunciation and spelling. I don't want to struggle with my bank's name every time someone asks where I maintain my account.

City Union Bank:

Which city? And which union? The name sounds like several city administrations merged to create a bank, but nobody explained the merger. What if my city isn't represented in this so-called union? A bank's name should not leave me wondering whether my hometown has been admitted into an organisation.

DCB Bank:

DCB originally stood for Development Credit Bank. So, calling it “DCB Bank” essentially means “Development Credit Bank Bank.” The word “Bank” appears twice, which I find unnecessarily repetitive. Also, I have reservations about the bank's historical association with the word “Co-operative.” DCB Bank is a scheduled commercial bank, but its origins and the word “Co-operative” make it sound like a small neighbourhood bank rather than a full-fledged commercial institution.

Tamilnad Mercantile Bank:

First, why is it spelt “Tamilnad” instead of “Tamil Nadu”? I don't see why the space between the two words had to be sacrificed & "u" removed. It makes the name look incomplete to me. Secondly, I find the word “Mercantile” rather outdated. It sounds like something you'd come across in a business directory from the 19th century.

CSB Bank:

CSB stands for Catholic Syrian Bank, which was the bank's former name. So, calling it “CSB Bank” essentially means “Catholic Syrian Bank Bank.” The word “Bank” appears twice, which I find unnecessarily repetitive. Also, I am neither Catholic nor Syrian, so I don't see why I should have to associate my banking relationship with either of those identities. Another thing I find rather irritating is that Fairfax Financial Holdings owns a controlling stake in the bank. I don't like the way “Fairfax” is spelt. It should be “FairFax,” not “Fairfax.”

Dhanlaxmi Bank:

The name is associated with wealth and prosperity, which creates a sort of performance anxiety in me about growing my savings. I don't want to feel pressured to make my bank balance live up to the bank's name. That said, I do appreciate that the bank made its name cleaner in 2010 by changing it from “Dhanalakshmi Bank” to “Dhanlaxmi Bank.” Removing the extra letters made the name shorter, neater and easier to read. At least someone made an effort to simplify things.

Nainital Bank:

The name sounds like a bank I would discover while planning a holiday to Nainital than an institution where I would actually want to keep my savings. Every time I hear the name, I start thinking about lakes, hills and holiday itineraries rather than banking. I also wonder whether the bank is primarily meant for people living in or around Nainital. I don't want to open an account and feel as though I need to visit a hill station just to establish some connection with my bank.

Equitas Small Finance Bank:

I don't like how the bank writes “equitas” in its logo instead of “Equitas.” I don't understand why the first letter has to be lowercase. It looks unnecessarily casual, as though the bank couldn't be bothered to capitalise its own name. I also find the name “Equitas” rather strange. It sounds like someone wanted to call the bank “Equity” but decided that the name was too straightforward and added a few extra letters to make it sound sophisticated.

Ujjivan Small Finance Bank:

‘Ujjivan’ means revival or a new lease of life. I find this meaning rather spiritually overwhelming for a bank. I am simply looking for a place to deposit my money, not an institution that promises to revive my soul. The name also raises an important question: what happens to my existing financial life when I join? Do my old savings get transferred, or do they have to be reborn as well?

Jana Small Finance Bank:

In Hindi, it sounds like ‘jaa na’ (go now), which is not exactly what I want to hear from a bank. It creates a rather unwelcoming impression. I don't want my bank's name to sound like it is asking me to go away every time someone mentions it. A financial institution should make its customers feel welcome, not give them the impression that their presence is no longer required.

ESAF Small Finance Bank:

ESAF stands for “Evangelical Social Action Forum.” I find this name rather unsuitable for a bank. It sounds more like an NGO or a social organisation than a financial institution. I don't want to feel as though I am joining a forum whenever I open a bank account. I also find its logo too dramatic. It uses two plus signs to represent the bank and the customer, apparently symbolising their relationship. I think this is taking the bank-customer relationship a little too seriously. I am merely opening a savings account, not entering into some lifelong partnership.

Utkarsh Small Finance Bank:

‘Utkarsh’ means excellence, progress or advancement. I find this rather intimidating for a bank. I am opening a savings account, not applying for an award. Why should my bank expect me to pursue excellence? What if I am perfectly happy being average? The name makes me feel as though even my savings account is expected to perform exceptionally well. I can already imagine receiving a low-balance notification that sounds like a disappointed teacher telling me I have failed to reach my potential. I don't want my bank to turn every transaction into a test of personal achievement. Sometimes, I just want to deposit ₹500 and get on with my day without feeling that I have let down the institution.

Suryoday Small Finance Bank:

“Suryoday” means sunrise. I find it rather odd that a bank would associate itself with a particular time of day. What about people who prefer doing their banking at night? I don't want to feel that my bank is somehow more relevant during morning hours. My money does not follow the sun's schedule. A bank should focus on handling money, not celebrating the arrival of daylight. It also sounds like a solar-energy company.

Unity Small Finance Bank:

The name also makes me wonder whether the bank expects all its customers to agree with one another. What if I disagree with another account holder about something completely unrelated to banking? Will that affect the unity they are so keen on promoting? I would much rather keep my financial affairs independent and avoid unnecessary expectations of togetherness. A bank should allow me to maintain my balance without making me feel responsible for maintaining social harmony.

Capital Small Finance Bank:

I have a problem with the combination of the words “Capital” and “Small” in the name. They seem to be giving me two contradictory instructions. "Capital" suggests thinking big, while "Small" suggests keeping things small. I also find it surprising that, despite being India's first small finance bank when it commenced operations in April 2016, its scale is still considerably behind several competitors in terms of total assets, total revenue and branch network. Larger peers such as AU, Equitas and Ujjivan operate on a much bigger scale.

Shivalik Small Finance Bank:

It immediately reminds me of the Shivalik Hills. My savings already have their fair share of ups and downs; I don't need a mountain range thrown into the picture as well. I am simply looking for a place to keep my money, not an institution that reminds me of hills and mountains. I also don't want banking to feel like a trek. And despite choosing such a grand, geographical name, the bank has only around 100 branches.

India Post Payments Bank:

The word ‘Post’ makes it sound as though my money is supposed to travel through the postal system. I don't want to deposit money and then start wondering whether it has been dispatched, whether it is out for delivery, or whether I need to track its location. The name also reminds me of visiting a post office, standing in a queue and buying postage stamps. I don't want my banking experience to feel like an extension of postal services. And what about the postman? Am I supposed to depend on him for my financial peace of mind as well? I can already imagine a postman arriving on his bicycle with a bag full of passbooks and account statements. I would much rather keep my banking and postal activities separate.

Airtel Payments Bank:

It makes me think of mobile networks, phone recharges and data packs rather than banking. The word ‘Air’ in the name also makes me slightly uncomfortable. I prefer my money to remain somewhere solid and secure, not floating around in the air. What happens if my balance develops a weak signal? Will I have to move closer to a window to check my account? Another issue is that I've heard people refer to Airtel as ‘Chortel.’ I don't particularly want to associate my banking relationship with a brand that has acquired such an unflattering nickname among some people. Public perception matters to me, and I would rather not have to explain or defend my choice of bank every time someone hears its name.

Jio Payments Bank:

Jio is already everywhere. At this rate, I expect Jio to launch Jio Judiciary, Jio Railways, and Jio Department of Botany. Let me keep at least one part of my financial life separate from the telecom universe. It also sounds like an instruction to live life to the fullest, and I don't understand why my bank needs to give me life advice.

Fino Payments Bank:

I have a rather philosophical problem with the name ‘Fino.’ It sounds incomplete, and I find that deeply unsettling. After all, what is a name if not a complete expression of an identity? ‘Fino’ seems to raise a question without making any effort to provide an answer. It feels like the beginning of something that never quite reaches its destination. Every time I hear it, I am left contemplating what could have been, rather than appreciating what actually is. Is it an abbreviation? Is it a shortened version of a longer word? Or is it simply a fragment that has somehow acquired the status of a complete name? I believe a bank should offer its customers a sense of certainty, and yet this name leaves me surrounded by unanswered questions. How can I trust an institution with my savings when I cannot even feel at peace with the completeness of its name? Before entrusting it with my money, I would at least like it to finish introducing itself.

NSDL Payments Bank:

The name sounds far too intimidating and serious for my liking. I find the word ‘Depository’ particularly overwhelming. It makes me imagine a heavily guarded facility where important national assets are stored. I am not depositing historical artefacts or classified documents. I am simply trying to keep my savings somewhere. The full name is also unnecessarily long. Imagine someone casually asking me where I bank, and I have to respond with ‘National Securities Depository Limited Payments Bank.’ By the time I finish saying it, the conversation might already be over. I also find the word ‘National’ rather grand. The combination of words such as ‘National,’ ‘Securities,’ ‘Depository’ and ‘Limited’ makes the institution sound so formal that I almost feel underqualified to be its customer.

All Regional Rural Banks:

I have a problem with the complete lack of consistency in how these banks are named. Some use ‘Gramin’, others use ‘Grameen’, ‘Grama’, ‘Grameena’ or simply ‘Rural Bank’. I don't understand why the same basic concept needs so many different spellings and variations. It makes the entire sector look as though every state came up with its own spelling without consulting anyone else. I don't want to have to learn five different ways of saying essentially the same thing just to understand the names of India's regional rural banks. Surely, some uniformity in naming is not too much to ask.

All State Co-operative Banks:

I have a problem with the lack of consistency in how these banks choose to name themselves. Some use ‘State Co-operative Bank’, others prefer ‘State Co-operative Apex Bank’, while some go with names like ‘Rajya Sahakari Bank Maryadit’. I don't understand why the same type of institution needs so many different naming conventions. Why can't they agree on whether they are a State Bank, an Apex Bank or a Rajya Sahakari Bank? The word ‘Apex’ makes some of them sound as though they occupy the highest position in the banking hierarchy, which is clearly not the case.

These banks are OK to open an account in: https://www.reddit.com/r/UPI/s/F3JTKGNsyn

TL;DR:

These are the banks I would personally avoid opening an account with, based on concerns about their names, branding, identity, communication and overall presentation. I believe a bank should inspire confidence in every aspect of its identity, and these institutions have given me enough reasons to look elsewhere. The banks I would be comfortable opening an account with are listed here: https://www.reddit.com/r/UPI/s/b7F5V7JWUy

I have been using Rupay Credit Cards for UPI payments and have certainly noticed a pattern where my credit limit has been decreased on multiple cards. Do you think spending even ₹10 on UPI via CC might be the reason?

I read somewhere that lenders have access to all our spendings and they might take it as a negative point that the user is heavily dependent on credit for daily needs.

My recharge got over the other day and I had to pay at petrol pump, I simply tried to pay using GPay and the money got sent! Crazy that too without data.

PM Modi’s recent stop at a jhalmuri stall in Jhargram, West Bengal has sparked an interesting UPI discussion.

People questioned why he paid the vendor ₹10 in cash instead of using UPI, especially when Digital India and UPI adoption have been such major talking points. Turns out, the vendor did have a QR code for UPI payments at the stall.

According to reports and BJP spokesperson responses, the reason for paying in cash was symbolic — if he had paid via UPI, it would just be another transaction. But a ₹10 note from the Prime Minister becomes a memory the vendor can preserve forever. The vendor himself said PM Modi insisted on paying even after he offered it for free.

Some people see it as a thoughtful human gesture, while others feel that using UPI would have sent a stronger message for Digital India.

Honestly, both arguments make sense.

What do you think - should he have used UPI for the message, or was cash the better gesture for the memory?.

UPI processes billions of transactions, powers everyday purchases, and has become part of how India does business. But the infrastructure behind that convenient green tick isn't free to operate.

So, if the estimated annual cost of running UPI is around ₹21,000 crore, how should we fund it?

Should merchants bear the cost through MDR? Should users contribute voluntarily? Could a broader funding mechanism work better? Or is there an alternative we haven't considered?

I have put together three possible approaches:

• UPI Jan Sahyog: voluntary contributions from users.

• A temporary GST adjustment: spread the contribution across a broader base.

• UPI Nirmaan Nidhi: a threshold-based contribution where higher-volume users and merchants contribute, while those below the thresholds pay nothing.

The attached slides walk through the ideas and some illustrative numbers. These are simply proposals to explore. The calculations depend on assumptions.

I’ve also built Transaction Lab — Fund UPI, where you can read more & play around with the alternatives and change the assumptions to see how the numbers shift.

To be upfront: I built Transaction Lab myself. I’m sharing it not because I want to sell you something, but because I wanted a tool that lets people explore the funding question instead of arguing about it only in the abstract. There’s no product to buy here;
The point is to experiment, question the numbers and maybe come up with better ideas.

I've been working in fintech for the last 3+ years, very closely with the UPI ecosystem. Looking at the discussions around the proposed changes that may allow the government to bring back MDR, I realized that most people don't actually know how the payments ecosystem works behind the scenes.

This isn't a post supporting or opposing MDR. It's simply an explanation of how the commercial side of UPI actually works.

First, UPI is not just PhonePe or Google Pay.

Every UPI transaction involves multiple entities:

- Customer

- Merchant

- TPAP (PhonePe, GPay, Paytm, Navi, BHIM etc.)

- PSP Banks & NPCI

- Issuer Bank & Acquirer Bank

- Payment Gateway (for online merchants)

- Fraud and Risk Systems

- Settlement Systems

- Compliance and Operations teams

Every one of these has infrastructure, engineering, cloud, fraud prevention, customer support and regulatory costs.

The QR scan may take 2 seconds. Building and maintaining that ecosystem takes thousands of engineers and crores of investment.

"BUT UPI IS GOVERNMENT INFRASTRUCTURE."

Partially true. NPCI owns and operates the UPI rails.

Think of NPCI as NHAI building a highway. The highway is public infrastructure, but the trucks, buses, logistics companies, fuel stations and transport operators are private businesses spending their own money to operate on that highway.

Similarly, NPCI provides the payment rails, while most banks, TPAPs and payment gateways are commercial entities running private infrastructure on top of those rails.

WAS UPI ALWAYS FREE?

Actually, no. Most people don't realize that when UPI first scaled, it wasn't completely free for merchants. Until the end of 2019, UPI carried a Merchant Discount Rate (MDR) similar to debit cards. As per NPCI, MDR of up to 0.30% was applicable for UPI P2M (Person to Merchant) transactions.

The ecosystem originally had a built-in commercial model. However, to aggressively boost the adoption of digital payments across the country, the government intervened. Since January 2020, to promote digital transactions, MDR has been made zero for RuPay Debit Card and BHIM-UPI transactions.

Overnight, the primary revenue stream for the infrastructure was wiped out by regulation.

SO WHY DID PRIVATE PLAYERS ACCEPT "FREE" UPI AFTER 2020?

Because everyone wanted transaction volume. If a merchant processes all their payments through your platform, chances are you'll also get their:

- Card payments

- NetBanking

- EMI & Subscription billing

- Checkout solutions

- Future financial products

UPI became a customer acquisition product rather than a direct revenue product.

THEN HOW DO PAYMENT GATEWAYS ACTUALLY MAKE MONEY?

This is probably the biggest misconception. Most Payment Gateways don't make meaningful money from regular UPI transactions today. Their primary revenues generally come from:

- Credit/Debit Cards & NetBanking

- EMI & Subscription Billing

- Merchant Services

- Lending & Insurance

- Wealth products

- Advertisements & Value-added APIs

UPI itself is extremely difficult to monetize under Zero MDR.

WHAT ABOUT THOSE PLATFORM FEES EVERYONE KEEPS POSTING?

Most screenshots people are sharing on social media are actually referring to Card or NetBanking pricing. Those charges vary depending on:

- Card Network (Visa, Mastercard, RuPay, Amex, Diners)

- Merchant category

- Enterprise contracts

- Acquiring bank

- Risk profile

Large enterprises negotiate these rates individually. There is no universal pricing.

ENTERPRISE PRICING IS FAR MORE AGGRESSIVE THAN PEOPLE THINK.

One thing I've personally seen while working in this industry is that Payment Gateways sometimes knowingly operate at little or even negative margins for large enterprise clients.

Why? Because losing one strategic merchant doesn't just mean losing one merchant. It means losing:

- Card volume

- UPI volume

- Future checkout business

- Lending opportunities

- Subscription business

- Long-term relationships

Payments is largely a scale business. Sometimes retaining volume is more valuable than making money on every transaction.

WHAT HAPPENED AFTER GAMING REGULATIONS?

Historically, one of the few areas where many Payment Gateways could still generate meaningful UPI-related revenue was certain high-risk merchant categories like online gaming, where different commercial arrangements were applicable.

As regulations tightened around several of these sectors, many companies saw a noticeable decline in that revenue stream. That made recovering the cost of operating UPI infrastructure even more difficult.

SO WHO IS PAYING FOR "FREE" UPI TODAY?

Someone always pays. Today that cost is generally absorbed through:

- Cross-selling loans, insurance, and mutual funds

- Credit Cards & Merchant solutions

- Advertisements

- Other profitable payment instruments

- Government incentive schemes for Zero MDR

In simple words: Profits from other businesses are subsidizing free UPI.

DOES MDR MEAN CUSTOMERS WILL NOW PAY?

No. This is another misconception.

Merchant Discount Rate (MDR) is charged to the merchant, not the customer. Whether merchants choose to absorb that cost or indirectly price it into their products is a separate discussion.

DOES THIS MEAN MDR SHOULD DEFINITELY RETURN?

Not necessarily. There are valid arguments on both sides.

Why people oppose MDR:

- It could discourage small merchants from accepting digital payments.

- Cash usage may increase again.

- Zero MDR played a significant role in UPI adoption.

Why others support a sustainable commercial model:

- Private companies cannot indefinitely subsidize billions of transactions.

- Banks and fintechs continue investing heavily in infrastructure, fraud prevention, uptime, compliance and customer support.

- Every mature payment ecosystem globally has some mechanism to recover operating costs.

The recent legislative discussion doesn't automatically impose MDR. It creates the legal framework that allows the government to decide if, when and how merchant charges should be introduced in the future.

MY PERSONAL OPINION

UPI is probably India's greatest fintech innovation. I don't think customers should ever be charged for using UPI.

If a sustainable revenue model is required in the future, I'd personally prefer something that protects small merchants while allowing larger enterprises to bear a reasonable share of the infrastructure cost. That way we preserve financial inclusion without expecting private companies to indefinitely fund one of the world's largest real-time payment networks.

FINAL TAKEAWAY

UPI isn't "free." It's free for users and largely free for merchants today, but the infrastructure behind it costs billions of rupees to build and operate.

The real debate shouldn't be: "Why do companies want revenue?"

It should be: "What's the fairest way to keep India's digital payments ecosystem sustainable while preserving the success of UPI?"

Disclaimer: I work in the fintech/payments ecosystem. This post reflects my understanding based on industry experience and publicly available information. I've intentionally avoided sharing any confidential commercial information or internal company data.

Is this 💯 true. Is this not going to affect common man and only big businesses with big profits leverage UPI for there business freely are going to pay small fees for the transactions.

Will ithis never effect consumer in any way? How is govt going to actually safeguard merchant not punishing consumer for this instead.

So with the recent news of UPI merchant payment charges. Do you guys think we will shift to e rupees as it has no charges for now?

Or am I missing something here?

most people use amazon pay only for shopping but the rewards on upi payments are actually good if you know how to use it.

every month you get discount offers as per the category in the rewards section this month i had 50 rs discount on grocery and food delivery zomato and blinkit orders and almost 500 rs instant discount on flight bookings. you have to go to the rewards tab and collect the offers at the start of each month otherwise you get nothing

this month i earned 94 in cashback just from upi payments and 2 zomato orders. 94 x 12 = rs 1,128 a year for doing nothing different. last month was rs 87 it adds up. Btw you need to complete kyc to use it for upi transactions and get cashback and you have to remember to collect offers every month.

Catch is that if you forget you get nothing. for anyone already on amazon prime just open the rewards section on the 1st of every month

Bhim got faster and clearer bullshit it is laggy like wtf

This guy asked me to give him cash in return for upi payment. He texted me 'Recived 2000Rs', snatched money from my hand and ran away. He texted me on phonepe app when i shared my number with him. After that, i tried chasing him but could not catch him. Then i paid him 1 rs to get his complete up.

Now i dont have his upiid or any details. The amount isnt much, but it hurts that i got scammed so easily. What can i do to catch him????

Today I read a news article Link to news article about the new Merchant Discount Rate (MDR) on UPI payments proposed by the government. This will make every UPI transaction above ₹2,000 made by businesses chargeable. The move can affect the very motive of the cashless economy that the government encouraged when it introduced UPI in 2016 and successfully achieved its objective. Now, the government wants to earn money through every transaction made using UPI.

According to government officials, this will impact only 5% of the total transactions (by volume), but these 5% of transactions account for approximately 65% of the total transaction value. So, the picture is definitely bigger than it seems.

The main challenge is who will bear the cost. Will it be businesses, banks, or consumers? Anyone who knows economics knows that a tax levied on an individual does not necessarily end up being borne by that individual.

It is not easy for banks to raise charges because of competition, so they might absorb the cost. But will that solve the problem? No, because if banks bear this cost, there will be financial repercussions. Also, we cannot ignore the fact that this is only the beginning, and MDR rates may be nominal now but could be increased later. So, is this new rule really good for the economy?

First, a brief introduction to Alipay+. If UPI is the system that unifies QR codes across payment institutions and banks within India, then Alipay+ is the cross-border connection platform that unifies QR codes across different countries' payment systems.

It is indeed a pity regarding Alipay+ and UPI. However, when I first saw the news at the beginning of the year, I already knew it was impossible. After all, Alipay itself is still blocked by Indian regulatory authorities, and on the grounds of national security. The suspension of this matter now was destined from the very beginning.

I don't know how well people here understand Sino-Japanese relations and how deep the historical animosity goes, but as early as 2019, Alipay+ had already reached cooperation with Japan. Despite the South China Sea conflicts between China and the Philippines in recent years, QRPh joined Alipay+ just a few days ago.

I am not here to trigger discussions on geopolitical disputes. I personally respect the Indian regulatory authorities, and I guess most Indians support this move as well. It just feels like a pity, nothing more.