Where the proposed 0.4% UPI MDR fee would go: the 40-30-20-10 revenue split

Wed Oct 14 2026

Of the 0.4% merchant discount rate proposed on UPI person-to-merchant transactions above Rs 2,000, 40% would go to the customer's bank, 30% to payment gateways, 20% to the UPI app and 10% to the app's sponsoring bank, according to NPCI's revenue-sharing structure. NPCI estimates only about 4% of merchant transactions would fall under the framework, with over 95% remaining free of any charge. The proposal has drawn mixed reactions from trader bodies: the Retailers Association of India wants a fixed fee instead of a percentage, the All India Mobile Retailers Association wants the levy scrapped, and the Confederation of All India Traders wants merchant-to-merchant transfers kept outside its scope. Sources: New Indian Express (New Indian Express)

Of the 0.4% merchant discount rate proposed on UPI person-to-merchant transactions above Rs 2,000, 40% would go to the customer's bank, 30% to payment gateways, 20% to the UPI app and 10% to the app's sponsoring bank, ac
NPCI estimates only about 4% of merchant transactions would fall under the framework, with over 95% remaining free of any charge.
The proposal has drawn mixed reactions from trader bodies: the Retailers Association of India wants a fixed fee instead of a percentage, the All India Mobile Retailers Association wants the levy scrapped, and the Confede