New Delhi, Aug 26: India’s Unified Payments Interface (UPI) ecosystem is entering a new phase, with greater focus on ensuring the long-term sustainability of digital payments.
According to a report, a targeted Merchant Discount Rate (MDR) of 0.25 per cent to 0.50 per cent on selected higher-value merchant transactions could generate a potential revenue opportunity of Rs 15,000 crore to Rs 30,000 crore, while consumer and person-to-person payments could remain free.
The report noted that 741 banks are currently connected to UPI, with monthly transactions crossing 22 billion in July 2026. The value of UPI transactions during the month stood at around Rs 29.87 lakh crore.
India’s payment landscape has undergone a major shift towards digital transactions, with digital modes accounting for 99.8 per cent of total transaction volume and 97.9 per cent of transaction value in Q1 FY27.
Person-to-merchant payments accounted for around 29 per cent of UPI transaction value during the quarter, highlighting the growing importance of digital payments for businesses and consumers.
As UPI continues to expand, the focus is increasingly on maintaining an affordable, secure and reliable payment system while ensuring the financial sustainability of the wider digital payments ecosystem.