Explained: How 2% MDR on RuPay-UPI may affect credit card industry

According to analysts, SBI Card and Paytm stand to gain the most if RBI agrees to levy 2% merchant discount rate (MDR) on RuPay-based credit cards linked to UPI

The proposed 2 per cent merchant discount rate (MDR) on credit card transactions on the RuPay-Unified Payments Interface (UPI), if implemented, may boost credit card spends and the average customer balance, observes global brokerage firm Macquarie.

“There are roughly 50 million merchants accepting UPI payments, compared to 6 million card point-of-sale (PoS) machines in India. Hence, expanding use-cases bodes well for credit card spend and the average customer balance,” it said in a report dated July 26.

The observation comes after Business Standard reported that the National Payments Corporation of India (NPCI) and banks have suggested levying an MDR of 2 per