business π UPI MDR fee boosts banking and payment stocks
Shares of payment and banking companies rallied on Wednesday, September 16, after NPCI introduced a 0.4% MDR on UPI payments above βΉ2,000, effective October 15. This new charge applies only to person-to-merchant (P2M) transactions exceeding βΉ2,000, while P2P transfers remain free for users. Analysts believe this move creates a significant revenue pool for banks and payment providers. CITI estimates the new MDR framework could generate an incremental ecosystem revenue of βΉ16,000β17,000 crore annually. This development is seen as a structural monetization event for the UPI ecosystem. π