By :-Deepak Chand Thakur, Managing Director & CEO, NPST
“The new framework for UPI marks a pivotal moment in India’s digital payments journey. Since its launch in 2016, UPI has transformed how India transacts, from street vendors to large enterprises, from metros to villages. The introduction of a sustainable MDR framework ensures that this remarkable public digital infrastructure can continue to grow, innovate, and serve every Indian for decades to come.
We commend the thoughtful design of this policy. By keeping 96% of merchant transactions and all person-to-person payments completely free, the framework protects the very foundation of UPI’s success – accessibility for common citizens and small merchants. The nominal 0.4% MDR on larger merchant transactions, which is significantly lower than credit card or debit card charges, creates a sustainable revenue model without burdening everyday users.At NPST, we have been privileged to power the payment infrastructure for numerous banks and financial institutions over the past 13 years.
We understand the complexity of building and maintaining systems that process billions of transactions securely and reliably. This policy acknowledges the real costs of operating such infrastructure and provides a path for continued investment in security, innovation, and expansion.The framework also establishes a dedicated fund for promoting digital payments in Tier 3-6 cities, northeastern states, and among small merchants. This means the success of digital payments will directly fund greater financial inclusion across India.NPST stands ready to support our bank and fintech partners in implementing this framework.
Our teams are already working on solutions that will help the ecosystem transition smoothly by the October 15th deadline. We see this as an opportunity to deepen our commitment to India’s digital payments vision.This policy change is the maturation of UPI from a government-supported initiative to self-sustaining financial market infrastructure. India has shown the world how to build inclusive digital public goods. Today, we are showing how to make them sustainable.”