India weighs restoring a 5–7 bps UPI merchant fee for large retailers with Rs 1–1.5 crore turnover
AI Market Summary
India is considering reinstating a 5–7 bps UPI merchant discount rate for large merchants (turnover above ~Rs 1–1.5 crore) while keeping P2P and small-merchant transactions free. The change would address payment providers’ lack of direct monetisation under zero-MDR, potentially improving unit economics for banks, PSPs, and payment infrastructure firms. Listed payments infrastructure provider ZETA could be a direct beneficiary if the policy is implemented.
Impact level
● Medium
Affected assets
ZETA/USDT+1.28%
AI Insight · ZETA/USDTAI Insight
▲ Bullish
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India’s government is considering reinstating a 5–7 basis-point Merchant Discount Rate (MDR) on UPI transactions for large merchants with annual turnover above Rs 1–1.5 crore, while small merchants and peer-to-peer transfers would remain free. The move is aimed at addressing payment service providers’ lack of a direct revenue stream under the current zero-MDR regime. A Zeta executive estimates the change could generate Rs 3,500–5,000 crore in annual industry revenue. ZETAUS, an India-focused payments infrastructure provider listed in the US, would directly benefit from the potential regulatory shift.
