NPCI to create fund from UPI MDR for digital payments expansion

The National Payments Corporation of India (NPCI) will establish a dedicated fund sourced from Merchant Discount Rate (MDR) proceeds to expand digital payment infrastructure. The fund aims to bring small merchants in smaller Indian cities online and support UPI's long-term sustainability.

Small merchants earning under Rs 1 lakh monthly will continue to remain exempt from MDR charges. The new framework is designed to strengthen digital payment adoption in underserved regions while supporting rural expansion efforts across the country.