A Lok Sabha answer says there is presently no proposal to impose UPI transaction charges, while a YourStory report describes a 0.4% merchant discount rate above Rs 2,000 and competing brokerage estimates of what it could yield.
The central government has told Parliament that there is presently no proposal to impose transaction charges on UPI. Answering an unstarred question in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said NPCI's circular dated 30 August 2019 had permitted acquiring banks to charge a merchant discount rate of 0.30 per cent of transaction value, and that the government had extended about Rs 8,730 crore in incentive support across four financial years to keep UPI services running. [2] [2]
That parliamentary position sits uneasily alongside reporting from YourStory, which says the government introduced MDR on UPI transactions above Rs 2,000, with a 0.4 per cent charge to merchants capped at Rs 300 for payments of Rs 75,000 and above, under a framework for large digital merchant payments. The report does not identify the specific notification or instrument, and the two accounts leave unresolved who is charged, on which categories, and from when. [1] [2]
Investors quoted in the report disagree on the scale of the effect. Deepak Gupta of WEH Ventures said the change can make established payment-led businesses inherently more profitable and allows payments to be viewed as a standalone investment. Investor Meshach Manohar said the valuation impact could be limited, estimating a possible 0.5 per cent to 1 per cent improvement in profits in the first two quarters, and cautioned that customer behaviour is unknown until two to three quarters pass. [1] [1] [1]
Brokerage estimates cited by YourStory are far larger. Jefferies projected Rs 150 billion to Rs 180 billion in industry revenue and raised its FY28-29 Paytm earnings estimates by 10-12 per cent, while Goldman Sachs estimated a potential industry revenue pool of about Rs 206 billion and saw 40-70 per cent upside to its FY28 EBITDA estimates for Paytm. Emkay Global estimated Paytm could generate Rs 11.2 billion in UPI MDR revenue in FY28 at a conservative 10 basis point take rate. [1] [1] [1]
Jefferies also estimated how the 40 basis points would divide, with about 16 bps to issuing banks, 12 bps to acquiring banks, 8 bps to the payer's payment app and 4 bps to the PSP bank. YourStory additionally reported that PhonePe could gain revenue visibility as it reportedly revives IPO plans, and that brokers such as Zerodha could face higher costs as UPI becomes chargeable for certain transactions. No primary statements from these companies were captured. [1]
The commissioning question asks what the 0.4 per cent UPI MDR changes and what the underlying instrument establishes, but no NPCI circular, gazette notification or government press release introducing that MDR was captured. The only primary document is a Lok Sabha answer dated 18 August 2025 stating there is presently no proposal to impose transaction charges on UPI, a substantive and temporal mismatch with the YourStory report dated 17 September 2026.
The instrument's legal scope, exemptions, covered transaction categories and effective date cannot be verified from the captured passages; the report does not name the notification.
All revenue-pool, earnings and price-target estimates come from a single YourStory report; the underlying Jefferies, Goldman Sachs and Emkay Global documents were not captured and the figures were not independently verified.
Claims about merchant and consumer behaviour rest on investor commentary in that one report; no merchant, consumer or regulator primary statements were captured.
The 13 per cent UPI failure-rate figure cited in the report and the assertion that public sector banks are bleeding were not independently verified and are not asserted in the article.
No independent discovery-channel evidence was available; some candidate sources were inaccessible per the capture log.
Absence of captured disagreement does not establish consensus, and both the bullish and sceptical views remain unverified.
Some candidate sources were inaccessible or outside the supported research domains; consult the capture log.
[1] YourStory · Will UPI MDR be a new revenue engine for fintech firms? | YourStory ↗
17/9/2026 · Publisher reporting
[2] sansad.in · AU4111_DBNB6R.pdf ↗
Source date not supplied · Original document / statement
Source records and any dated corrections accompany this article.
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PIB says person-to-person UPI stays free and roughly 96% of merchant transactions are unaffected; reporting by Mint and Firstpost says a 0.4% MDR applies to specified person-to-merchant payments above Rs 2,000 from October 15.