India’s digital payments ecosystem, powered largely by the rapid adoption of the Unified Payments Interface (UPI), may soon see a policy shift. A parliamentary panel has recommended the introduction of a Merchant Discount Rate (MDR) on UPI transactions, arguing that such a move is necessary to ensure the long-term sustainability of the digital payments infrastructure.
The recommendation comes amid growing concerns among banks, payment service providers, and fintech companies about the economic viability of maintaining and expanding the country’s digital payments infrastructure without a revenue stream.
Why the MDR Debate Has Returned
UPI has transformed India’s payments landscape since it
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