NPCI head calls for UPI MDR to fund cybersecurity costs
NPCI Managing Director Dilip Asbe stated that a market-driven economic model for UPI, including merchant discount rates (MDR), is necessary to cover rising cybersecurity, scalability, and infrastructure expenses. The current zero-MDR policy for UPI transactions may limit investments in fraud prevention and system upgrades.
Sources: inc42.com
“This signals a potential shift in UPI’s pricing strategy, which could impact fintech startups reliant on low-cost transactions.”
What it means
India’s UPI has grown rapidly under a zero-MDR policy, but escalating cyber threats and infrastructure demands may force a reevaluation. If MDR is reintroduced, it could strain smaller merchants and payment apps, while benefiting larger players with deeper pockets. The outcome will depend on how regulators balance growth incentives with sustainability.
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