UPI apps in India may reintroduce merchant discount rate

Business Aug 06, 2026

UPI apps in India might bring back the merchant discount rate (MDR), meaning some merchants could have to pay fees on certain payments.

Since 2020, UPI has been free for both users and shops, with platforms making money mainly by offering things like loans or insurance.

If MDR returns, it could change how these apps work and who they focus on.

UPI platforms shift toward larger merchants

With MDR, UPI platforms may shift their attention from just getting more users to working closely with businesses that handle bigger payments.

This move could help them earn more, but might also mean a new phase of competition and growth in India's digital payment scene.

For most everyday users, sending money will likely stay free, for now.