Why UPI MDR Is Needed For Long-Term Growth, Explains PhonePe CEO Sameer Nigam

UPI payments are set for a new Merchant Discount Rate framework, but the majority of transactions will continue to remain free. PhonePe Founder & CEO Sameer Nigam says around 96% of UPI transactions will remain free as most payments in India are below ₹2,000. Under the new framework, a 0.4% MDR will apply to UPI merchant transactions above ₹2,000. Nigam says the additional revenue can help the payments industry recover operational costs after years of absorbing losses on UPI transactions. He also argues that the revenue could support further investment and expansion of the UPI ecosystem. Person-to-person transactions will remain free. Watch the full reel for Sameer Nigam’s take on the new UPI MDR framework and what it means for the digital payments ecosystem.