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MobiKwik CFO pushes for MDR on large-merchant UPI as zero-fee model strains payment firms
Our read
Government keeps consumer UPI free but signals tiered MDR study for large merchants as incentive pool shrinks; no near-term implementation.
For operators
Zero-MDR UPI is squeezing payment-firm economics as government incentives shrink, so operationally prepare for a possible tiered-fee model targeting large merchants above the ₹50 lakh-₹1 crore monthly threshold.
Watch
FY27 Union Budget UPI incentive allocation vs actual firm losses
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The report,
MobiKwik CFO Upasana Taku urges reintroducing MDR on UPI for large merchants like Eternal and Policybazaar, calling zero-MDR unsustainable for banks and payment firms as government incentives decline. Impacts India's digital payment rails and merchant fee economics.
Reported figures
From the report. Source details below
| MDR up to | 0.90% debit card |
|---|---|
| shares ₹202.70, down | 1.2% |
| revenue ₹288.7 crore Q4 FY26 up | 7.8% |
Also in the report
- ₹50 lakh-₹1 crore monthly threshold
- UPI/RuPay incentive ₹2,000 crore FY27
- lending 25-30% of revenue
Other figures
- MDR up to 0.30% UPI P2M
- ₹2,196 crore FY26
- net profit ₹4.4 crore
- wallet ~20% market share
Why it matters to operators
A regulatory shift toward reintroducing MDR on large merchants like Eternal and Policybazaar would reshape payment-fintech unit economics and could catalyze consolidation or partnership plays across the digital-payments landscape.
What to watch next
- NPCI/MeitY official statement on MDR policy review
- Fintech quarterly margins deteriorating as incentives shrink
- Any pilot or consultation paper proposing merchant-size thresholds
- Consumer/merchant backlash intensity in political discourse
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- MobiKwik and peer fintechs (PhonePe, Paytm) coordinate industry-body (PCI) representations to MeitY/NPCI for tiered MDR
- Large merchants like Eternal, Policybazaar lobby against fees, warning of pass-through to consumers
- Payment firms diversify into UPI-linked credit, lending, and subscription monetization to reduce zero-MDR dependence
- Banks quietly support MDR return to offset UPI processing losses
The source
First seen