New Delhi: Industry experts have urged the government to continue the zero Merchant Discount Rate (MDR) regime for small merchants and low-value UPI transactions, warning that additional payment costs could undermine the affordability and financial inclusion gains achieved through digital payments.
The call comes as UPI continues to expand across the country. The platform processed a record 23.66 billion transactions worth nearly Rs 29.88 lakh crore in July 2026, underlining its growing importance for consumers, retailers and small businesses.
Experts said keeping small-ticket transactions free would help protect micro merchants, street vendors and other businesses that rely heavily on UPI for everyday payments. They argued that affordability has been a key factor behind the rapid adoption of digital payments among sections of the population that previously depended largely on cash.
At the same time, discussions around introducing MDR on selected higher-value merchant transactions have intensified as policymakers and the industry look for ways to make the UPI ecosystem financially sustainable. Industry stakeholders have called for a calibrated approach that preserves zero-cost digital payments for small merchants while addressing the long-term economics of the payments infrastructure.