Issuer banks to get 40%, merchant acquirers 30%, UPI apps to get 20% of the UPI MDR revenue
· Business · Moneycontrol
The Reserve Bank of India has finalized the distribution model for UPI Merchant Discount Rate (MDR) revenue. Under this framework, issuer banks will receive 40% of the collected fees, while merchant acquirers are allocated 30%. UPI application providers are set to earn 20% of the total revenue pool. This structure aims to balance the financial incentives for the various entities involved in the digital payment ecosystem. The decision follows discussions regarding the sustainability of the high-volume UPI transaction model across India.
Why it matters
This way split directly impacts the profit models of banks and fintech companies that process millions of' transactions. It may influence how these entities invest in payment infrastructure or charge additional fees to merchants in the future.
Read the original report — Moneycontrol
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