MDR charges on UPI transactions could spell big bonanza for PhonePe, Google Pay

Walmart-backed PhonePe and Google Pay could earn hundreds of millions of dollars a year in extra revenue from India’s move to allow merchant fees on its widely used Unified Payments Interface (UPI) digital payment network, entrenching the dominant apps’ lead over smaller rivals.

The end of UPI’s six-year reign as a free network will give PhonePe and Google Pay, which together accounted for 80% of UPI payment values last month, the firepower to expand to rural areas, while prompting rivals to chase higher-value transactions to draw users and fees.