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Sameer Nigam
Sameer Nigam
CEO & Co-Founder, PhonePe
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PhonePe CEO Decodes New UPI MDR Rules For Consumers

📅 Sep 16, 2026 NDTV Profit 10 MIN 886 VIEWS 16 SEGMENTS · 2 SPEAKERS
PhonePe Founder & CEO Sameer Nigam explains the new UPI Merchant Discount Rate (MDR) policy, saying the 0.4% MDR on large-value merchant transactions will help make the digital payments ecosystem more sustainable. He says around 96% of UPI transactions will remain free, while the additional revenue can support innovation, merchant digitization and expansion into smaller towns and cities. #UPI #UPIMDR #SameerNigam #PhonePe #DigitalPayments #UPIPayments #NPCI #Fintech #DigitalIndia #MerchantPayments #UPITransactions #CashlessIndia #FintechIndia #DigitalPayment #IndiaNews For more videos subsc...

What Sameer Nigam said

Written from the verified transcript and checked against it. Every figure links to the moment it was said.

PhonePe CEO Sameer Nigam welcomed the government's new 0.4% MDR on UPI merchant transactions above ₹2,000, calling it a critical first step toward sustainability after six years of losses. He noted that 96% of transactions remain free and that this MDR is among the cheapest globally, compared to 1.5% to 2.25% on credit cards. Nigam argued the revenue will enable investment to grow UPI users from 500 million to 800-900 million over the next seven to eight years and support international expansion. He dismissed concerns about merchant pushback, saying many already pay MDR on cards. He also rejected the idea that the framework creates friction between free public infrastructure and commercial sustainability, citing Aadhaar's model where citizens are free but businesses pay. The biggest beneficiary, he said, is ultimately the customer, since their experience remains free.

Key takeaways

  1. UPI MDR of 0.4% on transactions above ₹2,000 is among the lowest in the world, Nigam said.
  2. Revenue from MDR will fund growth of UPI users from 500 million to 800-900 million in 7-8 years.
  3. Nigam said UPI transactions have grown 100 times and now run 700-800 million per day.
  4. UPI will remain free for customers; merchants paying 0.4% is comparable to Aadhaar's business KYC charges.
  5. Nigam predicted customers will not stop using UPI despite MDR, citing habit and convenience.

Numbers and commitments

FigureWhat it refers toTypeAt
0.4% MDR on UPI merchant transactions above ₹2,000 guidance 0:25
96% Peer-to-peer transactions remaining free metric 0:25
500 million Current UPI users metric 1:35
800-900 million Target UPI users in 7-8 years guidance 1:35
6 million Merchants already paying MDR on cards metric 2:39
1.5% to 2.25% Typical credit card MDR price 2:39
700-800 million UPI transactions per day metric 4:08
10 years Time since UPI started with MDR timeline 4:08
100 times Increase in UPI transaction volume metric 4:08
4% Share of merchant transactions subject to MDR metric 7:40

Chapters

  1. 0:00Welcome for new MDR framework
  2. 1:35Investment needs for UPI growth
  3. 2:39Merchant acceptance of MDR
  4. 3:49Revenue reinvestment in infrastructure
  5. 5:11No change in business model
  6. 6:19Beneficiaries across ecosystem
  7. 7:40Public good versus commercial model
  8. 9:11Customer behavior unaffected

Questions asked in this interview

7
  1. 0:00So, from your perspective, will this be the beginning of a sustainable revenue model for the UPI ecosystem?
  2. 2:24In such a scenario, how commercially viable will a revenue-sharing model be for payment apps like yours?
  3. 3:49Do you think the revenue from MDR will create sufficient incentive to reinvest in payment infrastructure, technology, cybersecurity, and innovation?
  4. 5:11And will there be a need to focus more on high-value merchant transactions instead of transaction volume, as you mentioned there are 800 million transactions?
  5. 6:19Will it be the card networks or the banks?
  6. 7:40Will this framework be able to balance the two objectives of keeping UPI as a free public digital infrastructure and a commercially sustainable payment ecosystem?
  7. 9:11Will players like you see people start using it less, or what?
Interviewer 0:00 ↗
Sir, the government has implemented a 0.4% MDR on selected merchant UPI transactions above ₹2,000 and has said that about 96% of peer-to-peer transactions will remain outside this. So, from your perspective, will this be the beginning of a sustainable revenue model for the UPI ecosystem?
Sameer Nigam 0:25 ↗
It will be the beginning, and a very important beginning. Because as you said, 96% of transactions will remain free, as most transactions in India are below ₹2,000. For transactions above ₹2,000, NPCI has permitted a 0.4% UPI MDR. So, this charge will apply to larger transactions, and the revenue generated from this will at least cover our costs. For the past six years, when this MDR was free, the entire payment industry was going into significant losses every year. We were telling the government this every year, and the RBI as well. So, we have been waiting for six years, because before that, there was an MDR on UPI. In over 200 countries, there are digital payments. India was the only country where there was no MDR on UPI. So, now it has been introduced. Hopefully, the UPI market will continue to grow here as well.
With this revenue, we will be able to invest further to grow UPI. Currently, about 500 million citizens use UPI. We need to take this number to 800-900 million people in the next seven to eight years, and that requires money. If we want to go international, that also requires money. So, this was very, very important for growing the UPI ecosystem. And as you know, in today's world, there is cyber fraud, fraud, and chargebacks for merchants. The entire burden of that falls on the industry, on fintechs and banks. We have been paying all those costs from our own pockets for so many years. That's why almost all players in the industry were in losses. So, this is very welcome.
Interviewer 2:24 ↗
Sir, the MDR will not be charged to the customer, and merchants will also not be allowed to pass it on to the customer. In such a scenario, how commercially viable will a revenue-sharing model be for payment apps like yours?
Sameer Nigam 2:39 ↗
In my opinion, as of today, about 6 million merchants already pay MDR on RuPay, credit cards, Visa cards, Mastercard, etc. So, many merchants are actually already accustomed to paying MDR. In fact, on credit cards, the MDR is almost 1.5% to 2.25%. This is just 0.4%. So, I'm hearing many people say today that they won't pay. That's not the case. In fact, this is perhaps the cheapest MDR in the world. I've checked, and I haven't found it in any other market yet. 0.4% is either the lowest in the world or at the very bottom of the list. So, the government has kept it very cheap after much deliberation.
So, why wouldn't they pay? There is an advantage. There is a benefit. The customer doesn't face the problem of exact cash. Everyone comes and pays via the app. They can go cashless. There is data, so merchants can get loans with their data footprint. Many, many good things happen because of UPI. Payments are made. It's a good thing.
Interviewer 3:49 ↗
So sir, until now, UPI's growth has largely happened on a zero-MDR model. Do you think the revenue from MDR will create sufficient incentive to reinvest in payment infrastructure, technology, cybersecurity, and innovation?
Sameer Nigam 4:08 ↗
It absolutely will, sir. In fact, when UPI started 10 years ago, there was an MDR, and the market grew very quickly in the first four years. Then COVID happened, and in 2020, the government made the MDR zero. That helped, and small businesses also came on board. But if you look at the volume today, UPI transactions have increased 100 times. There are about 700 to 800 million transactions a day, which is a huge number. So, I feel that now the industry will have revenue. They will be able to invest. They will be able to go into smaller cities. They will be able to digitize more merchants. On the customer side, the apps are finally getting money after six years. So, we will all be able to do more marketing and bring in new use cases. All businessmen in the world want to grow their business. Payment companies are no different. They will grow only when they have the money.
Interviewer 5:11 ↗
Sir, with this decision about MDR, will there be any change in your business model? And will there be a need to focus more on high-value merchant transactions instead of transaction volume, as you mentioned there are 800 million transactions?

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Cite this transcript

APA, MLA, BibTeX
APA

Nigam, S. (2026, September 16). PhonePe CEO Decodes New UPI MDR Rules For Consumers [Interview transcript]. NDTV Profit. CEOInterviews.AI. https://ceointerviews.ai/interview/1352438/

MLA

Sameer Nigam. "PhonePe CEO Decodes New UPI MDR Rules For Consumers." NDTV Profit, 16 Sep. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1352438/.

BibTeX 
@misc{nigam2026_1352438,
  author       = {Sameer Nigam},
  title        = {PhonePe CEO Decodes New UPI MDR Rules For Consumers},
  howpublished = {Interview transcript, NDTV Profit. CEOInterviews.AI},
  year         = {2026},
  month        = {sep},
  url          = {https://ceointerviews.ai/interview/1352438/},
  note         = {Speaker-attributed transcript with timestamps}
}