# UPI fee shift could generate $1.1 billion revenue for apps

2026-09-22T15:12:23+00:00 | Business & Economy | Indian Opinion Desk

Corroboration: 2 independent outlets

India's Unified Payments Interface (UPI) will cease to be free from October 15, after regulators permitted a 0.4% merchant discount rate (MDR) on transactions above Rs 2,000. Brokerage Bernstein estimates the fee could generate up to $1.1 billion in annual revenue for payment apps by March 2028. NDTV Profit reports that PhonePe and Google Pay, which together handle 80% of UPI payments, could capture around $900 million of that revenue. Khaleej Times adds that the fee could entrench the dominance of these incumbents and give them firepower to expand into rural areas. PhonePe co-founder Rahul Chari called the MDR 'a positive step towards offsetting operational costs.' The fee has drawn political criticism and concerns that merchants may pass the cost to consumers. Smaller rivals like MobiKwik expect to target higher-value transactions. The National Payments Corporation of India has twice deferred a decision on a proposed 30% market-share cap for UPI apps.

## Indian Opinion Analysis

Both sources report the same Bernstein estimate, but NDTV Profit leads with the revenue opportunity for apps, while Khaleej Times foregrounds the entrenchment of dominant players and the risk of renewed regulatory scrutiny. The critical framing highlights that smaller rivals and merchants may struggle, while the pro-market framing treats MDR as a necessary correction to an unsustainable free model. Neither source examines whether the fee will actually cover costs for smaller apps or merely widen the gap. The next date to watch is October 15, when the fee takes effect.

## Coverage

- ndtvprofit.com (neutral report) <https://www.ndtvprofit.com/business/new-upi-fees-may-unlock-1-1-billion-revenue-pool-for-payment-apps-gpay-phonepe-to-lead-12081430#publisher=newsstand>
  Leads with revenue projection and market share, no critical framing
- khaleejtimes.com (government critical) <https://www.khaleejtimes.com/business/big-to-get-bigger-indias-upi-fee-shift-to-entrench-dominant-incumbents>
  Highlights entrenchment of incumbents and regulatory concerns

Tags: Google Pay, NPCI, PhonePe, RBI, UPI
Canonical: https://indianopinion.org/new-upi-fees-may-unlock-1-1-bn-revenue-for-payment-apps/
License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources.
Cite: https://indianopinion.org/new-upi-fees-may-unlock-1-1-bn-revenue-for-payment-apps/#story-in-brief