NPCI Managing Director and CEO Dilip Asbe has said the possibility of consumers having to bear UPI Merchant Discount Rate (MDR) charges is limited. According to him, the potential impact could be restricted to around 10 per cent of the overall transaction value on which MDR is collected.
Speaking at the 13th SBI Banking & Economics Conclave 2026, Asbe said a large share of UPI transactions falls outside the current charging framework. He also indicated that most merchants are unlikely to transfer the cost of MDR to customers.
75% of UPI Value Outside Charging Framework
Asbe said around 75 per cent of the overall UPI transaction value is currently outside the MDR charging framework and therefore would not be affected by the policy.
Of the roughly Rs 30 lakh crore in total UPI transaction value, merchant payments account for around Rs 6-7 lakh crore. The charging framework primarily applies to transactions above Rs 2,000.
Asbe explained that a large majority of QR-code merchants have not recorded transactions above the Rs 2,000 threshold. Therefore, he said, these businesses would see no direct impact from the policy.
Large Merchants Account for Most MDR Collections
According to Asbe, around 80 per cent of the MDR collected comes from businesses with annual gross merchandise value (GMV) and digital payment collections of more than Rs 1,000 crore.
These larger businesses already accept credit cards and pay considerably higher charges on such transactions. Based on this, NPCI expects them to be less likely to pass UPI-related costs on to consumers.
Asbe said businesses with annual turnover of Rs 1 crore and above could account for another 10 per cent of MDR collections within the remaining 20 per cent. These businesses also accept credit cards and may not necessarily transfer the charges to customers.
However, he acknowledged that there remains a possibility of consumers being charged in the remaining 10 per cent of MDR collections. He said banks, NPCI, acquiring institutions and payment aggregators would need to work together to prevent such costs from being passed on to customers.
UPI Transaction Growth Outlook
Discussing the growth of UPI, Asbe said transaction value is currently expected to rise by around 10 per cent this year, while transaction volumes could increase by 15-17 per cent.
He attributed the slower pace of growth mainly to reduced investment by ecosystem participants following the heavy spending on UPI infrastructure during its first five to six years. The absence of a revenue model has also contributed to lower investment, while education, awareness and trust could influence future growth.
UPI’s Long-Term Expansion Plans
Asbe said the long-term goal is to expand UPI usage among one billion users and develop infrastructure capable of supporting wider access to credit, investments and insurance.
The comments were made at the 13th SBI Banking & Economics Conclave 2026. The report was published by ANI through a syndicated feed.
Disclaimer
This article is based on statements attributed to NPCI Managing Director and CEO Dilip Asbe and information published through a syndicated news feed. It is intended for general informational purposes and does not constitute financial advice. UPI charges, policies and related developments may change based on decisions by the relevant authorities and institutions.