UPI Transaction Value Climbs 20% to Rs 177 Lakh Crore in H1 FY27, Ahead of New MDR Implementation
Key Highlights
- UPI transactions reached 145 billion in H1 FY27, up 27% from 114 billion in the same period last year.
- Transaction value rose 20% to Rs 177 lakh crore in H1 FY27.
- New MDR framework starts October 15, charging 0.4% on UPI transactions above Rs 2,000.
UPI transactions have surged by 27% to 145 billion in the first half of the current financial year. Driven by a 20% increase in transaction value to Rs 177 lakh crore. According to National Payments Corporation of India (NPCI) data.
Industry watchers point out that despite a marginal month-on-month decline in UPI volume and value in September. The average daily transactions were higher at 802 million compared to 791 million in August.
The September data comes just two weeks before the implementation of a new merchant discount rate (MDR) on specified high-value UPI payments. From October 15, merchants will be charged an MDR of 0.4% on UPI transactions above Rs 2,000.
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The new MDR framework aims to create a sustainable revenue model for the digital payments ecosystem. The amount collected through the MDR will be distributed across the UPI ecosystem. With customers' banks receiving 40% of the MDR.
Payment gateways 30%, UPI apps 20%, and the sponsoring bank of the UPI app the remaining 10%.
Everyday UPI payments to remain free. Meanwhile, transactions above Rs 2,000 involving railways, telecom, fuel, and insurance will attract a flat Rs 5 fee per transaction. Capital market transactions, including mutual funds and stockbroking, will be charged a 0.02% MDR, capped at Rs 300.
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UPI's reach has also extended beyond India, with the payment system now accepted in 11 countries, including Uzbekistan, Singapore, and France.
NPCI, an initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA), operates as the umbrella organisation for retail payments and settlement systems in India.
Since its launch on August 25, 2016, UPI has seen a sharp rise in transaction value, with transactions worth Rs 0.07 lakh crore recorded through the system in FY17, and the figure rising to around Rs 314 lakh crore by FY26.
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I write about the forces shaping business and the global economy, from startup growth and changing markets to international trade and policy. My work focuses on breaking down complex developments into clear, practical insights and understanding what they could mean for businesses, investors, and the wider economy.
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