New Delhi, September 16, 2026 (Yes Punjab News)
The introduction of a Merchant Discount Rate (MDR) on certain Unified Payments Interface (UPI) transactions could help create a sustainable revenue model for India’s digital payments ecosystem and support its expansion to one billion users over the next decade, fintech industry leaders said on Wednesday.
MobiKwik Co-founder, Executive Director and CFO Upasana Taku said UPI had transformed India’s payments landscape over the past decade and played an important role in expanding access to financial products and services.
However, the rapid growth of UPI has also placed a significant cost burden on banks and financial institutions, she said, as transactions currently generate little or no direct revenue despite accounting for a substantial share of their payment portfolios.
“UPI has already transformed the Indian economy, but the ecosystem also needs a sustainable economic model to support its next phase of growth,” Taku said in an interaction with IANS.
Taku said around 500–600 million people currently use UPI and that expanding the platform’s reach to one billion users over the next 10 years would require a stable source of revenue.
According to her, the server cost associated with a single UPI transaction is currently around 17–20 paise. Beyond these direct costs, banks and fintech companies also have to invest significantly in engineering infrastructure, risk management and cybersecurity to operate and secure the payment ecosystem.
She said government incentives provided to support UPI operations had covered only around 10 per cent of the overall cost, making the introduction of MDR an important step towards improving the system’s financial sustainability.
MobiKwik Co-founder, Managing Director and CEO Bipin Preet Singh also backed the move, saying UPI had helped India build the world’s largest real-time payments ecosystem over the past decade.
He noted that the infrastructure is largely supported by banks and financial institutions, which bear significant operational and technology costs.
“Introducing UPI MDR can strengthen the long-term sustainability of the ecosystem,” Singh said.
The fintech executives said a sustainable revenue framework would be important to maintain investments in technology, cybersecurity and risk management as UPI usage continues to expand across the country.
FOLLOW NOW
