• UPI MDR scope: The government clarified that consumers and most merchant transactions will remain free under any future UPI MDR, applying only to transactions above a specified threshold. Dinesh Khara noted merchants will likely absorb the nominal charge as it remains significantly cheaper than the cost of handling cash or cheques.
• Industry cost burden: Upasana Taku stated that the current government subsidy of ₹2,000 crore covers only 10% to 11% of the ₹20,000 crore annual cost required by banks and fintechs to manage UPI uptime, scale, and cybersecurity.
• Proposed MDR rate: The Payments Council of India and fintech players have proposed a nominal MDR between 0.3% and 0.5%, aligned with debit card pricing, to make the payments ecosystem commercially viable.
• Fintech market competition: Taku argued that a zero-MDR environment unfairly favors deep-pocketed market leaders that can absorb long-term capital burn, whereas introducing a nominal fee ensures a level playing field for independent Indian fintechs.