UPI MDR May Be Set At 40 Bps; Banks Could Get Largest Share: Report

The government may soon notify a framework for levying a merchant discount rate (MDR) on select Unified Payments Interface (UPI) transactions, with the fee potentially set at around 40 basis points (bps), or 0.4% of the transaction value. According to an Economic Times report, issuing banks could receive 40% of the MDR, while the remaining fee could be divided equally between third-party application providers (TPAPs), such as PhonePe and Paytm, and acquiring banks, with each receiving 30%.