One Mobikwik Systems reports that the NPCI will introduce a 0.4% Merchant Discount Rate on UPI transactions above ₹2,000 starting October 15, 2026. This move allows the company to monetize UPI P2M payments both as a third-party app provider and as an acquirer, turning previously non-chargeable transactions into a new revenue source while keeping UPI free for retail users.
One Mobikwik Systems Set for Revenue Growth via New UPI Fee Structure
- New MDR of up to 0.4% on UPI P2M transactions exceeding ₹2,000.
- Effective date for implementation is set for October 15, 2026.
Reader Takeaway: New UPI transaction fees allow Mobikwik to monetize high-value merchant payments, significantly boosting its core payments segment revenue.
What just happened
The National Payments Corporation of India (NPCI) has issued a directive establishing a Merchant Discount Rate (MDR) of up to 0.4% for Person-to-Merchant (P2M) UPI transactions valued above ₹2,000. This change marks a shift in the domestic digital payments landscape, which has historically relied on zero-MDR policies to drive adoption. Users will remain unaffected, as the fee applies only to the merchant side of the transaction.
Why this matters
For One Mobikwik Systems, this regulatory update transforms high-volume UPI transactions from a cost center into a direct revenue driver. The company operates in a dual capacity: as a Third-Party Application Provider (TPAP) managing consumer transactions, and as a payment acquirer for merchants. By charging an MDR on larger transactions, the company gains a new lever to improve its take rate and overall payments profitability.
Management Outlook
Management is positioning this as a strategic enabler to scale its merchant footprint. The business intends to leverage the revenue generated from the 0.4% fee to reinvest in its UPI infrastructure and expand its market presence. The company has committed to informing shareholders of the specific financial impact closer to the October 2026 effective date.
What to track next
Investors should monitor the company’s upcoming quarterly filings for updates on the integration of these fees into their merchant billing systems. Further disclosure will be necessary regarding how the company splits this revenue between its TPAP and acquiring businesses.