Government may do away with UPI subsidies as MDR revenue kicks in
Mumbai: The government could discontinue subsidies for low-value Unified Payments Interface transactions following the introduction of merchant discount rate (MDR) on larger UPI payments, as banks and payment companies begin earning transaction-linked revenue from the network, people familiar with the matter said.
The Centre has budgeted ₹2,000 crore for incentives on UPI and RuPay transactions in FY27, but no fresh subsidy has been paid for transactions undertaken since April 2025, the people said.
