Mumbai, Sept 25:
Only about 10 per cent of the overall value of UPI transactions could face the risk of charges being passed on to consumers under the merchant discount rate (MDR), with large corporates, which already accept credit cards, absorbing most of the proposed costs, NPCI chief Dilip Asbe said on Thursday.
“The real risk of consumers getting charged is 10 per cent of the overall value,” the National Payments Corporation of India (NPCI) managing director and CEO said, addressing the 13th SBI Banking & Economics Conclave 2026 here.
He added that 80 per cent of the MDR collected would come from businesses with annual turnover of more than Rs 1,000 crore, which already accept credit cards and pay significantly higher charges.
“About 80 per cent of the MDR is collected from the businesses which are doing more than about Rs 1,000 crore per annum,” Asbe said.
Around 10 per cent of the overall MDR charged by companies with an annual turnover of Rs 1 crore and above may not be passed on to consumers, he added.
According to the NPCI chief, since such businesses already factor credit-card charges into their pricing and have not generally offered discounts for UPI payments, there is an expectation that they may not pass on the proposed UPI charges to consumers.
About 96 per cent of transaction volume and 75 per cent of the overall value of UPI transactions are currently not expected to attract charges, he noted.
He said the merchant base is around 60 million, and about 75 per cent of QR-code merchants had not received even a single transaction above Rs 2,000.
“There is absolutely no impact of our policy back there,” he said.
“However, (for) the remaining 10 per cent, yes, there is a possibility, and the banks and NPCI, the providers and payment educators, we have to work towards ensuring that the charges are not passed back to them,” he said.
He also said 5 per cent of the MDR collection is proposed to be channelled into a fund for young entrepreneurs and areas that require support.
NPCI is working with the RBI and other stakeholders to design the fund, he said.
The fund could reach around Rs 3,000 crore over a three-year period, he added.
The objective is to use the fund to accelerate UPI acceptance among small merchants, including through greater deployment of sandboxes and other payment infrastructure.
India currently has around 60 million active merchants in the UPI ecosystem, while the number of sandboxes is estimated at around 20-25 million, according to Asbe.