UPI’s new MDR pot: 5% of collections to be used for bringing small merchants online
- Posted on September 20, 2026
- By Business News Today
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- 1 min read
In brief
NPCI launches an innovative financial initiative allocating 5% of MDR revenue to establish a dedicated fund for merchant digitalization. This strategic move aims to accelerate digital payment adoption across underserved markets and smaller towns throughout India. Small merchants earning less than Rs 1 lakh monthly remain exempt from MDR charges, fostering financial inclusion while strengthening UPI's infrastructure for sustainable long-term growth and rural penetration.
Summary auto-generated by AI from the original publisher's content. Editorial standards.
UPI’s new MDR pot: 5% of collections to be used for bringing small merchants online
NPCI will introduce a dedicated fund from MDR proceeds for small merchants. This fund aims to expand digital payment infrastructure in smaller Indian cities. Eligible small merchants receiving under Rs 1 lakh monthly will remain exempt. The new framework supports UPI's long-term sustainability and rural expansion efforts.
