Canara Bank estimates around ₹450cr from proposed UPI MDR framework
Canara Bank estimates around ₹450 crore from the proposed MDR framework on UPI payments.
The bank participates as an issuer bank, acquiring bank and PSP, and already has the Ai1 app.
MD & CEO Brajesh Kumar Singh says a solid UPI model could inspire banks to try out more payment tech and features.
Low value UPI limits MDR income
Here's the challenge: 96% of UPI payments are under ₹2,000, so the actual MDR income is limited. Plus, fees are capped at just ₹5 for things like fuel and utility bills.
Singh shared that last year's payment costs hit ₹900 crore, so while MDR helps offset expenses, it's not a windfall.
And since MDR earnings get split with other players in the system, Canara Bank only gets a slice of the pie.
Still, Singh is hopeful that as digital payments grow, so will opportunities for banks to innovate and earn more.