Data released by the National Payments Corporation of India (NPCI) shows that UPI processed roughly 145 billion transactions in the first half of the current financial year, representing a 27% rise over the 14 billion transactions of the previous year’s corresponding period, with total transaction value climbing 20% to reach Rs 177 lakh crore compared to Rs 148 lakh crore previously, despite a minor month-on-month dip in September where volume fell 1.7% to 24.07 billion transactions and value dropped 1.5% to Rs 29.37 lakh crore from August figures, an occurrence happening despite September having 30 days compared to August’s 31, because on a daily average basis, performance improved with 802 million transactions processed daily in September against 791 million in August. The release of this September data precedes the implementation of the new merchant discount rate (MDR) framework effective October 15 for specific high-value UPI transactions, which mandates a 0.4% charge on merchant payments exceeding Rs 2,000 while leaving person-to-person transfers free, establishing a revenue model where the MDR collected is split with 40% going to customers’ banks, 30% to payment gateways, 20% to UPI apps, and 10% to the sponsoring bank. Merchants will bear this fee—capped at Rs 300 for transactions of Rs 75,000 and above—while personal payments and most regular merchant transactions remain unaffected, and specific essential services like railways, telecom, fuel, and insurance above Rs 2,000 will attract a flat fee of Rs 5, capital market transactions will carry a 0.02% MDR capped at Rs 300, and small merchants with monthly collections up to Rs 1 lakh via UPI QR codes remain fully exempt, protecting about 96% of all merchant transactions. NPCI operates as the retail payment umbrella organization established by the RBI and IBA, running UPI to facilitate real-time transactions that have skyrocketed from Rs 0.07 lakh crore in FY17 to nearly Rs 314 lakh crore by FY26 since its inception on August 25, 2016, reflecting a growth exceeding 4,000 times over ten years.
