UPI transaction volumes declined 1.8% month-on-month to 24.07 billion in September from a record 24.51 billion in August, according to NPCI data reported by inc42.com. The value of transactions also dropped 1.5% to ₹29.37 lakh crore from ₹29.82 lakh crore. Despite the dip, transaction volumes rose 23% year-on-year, while transaction value grew 18%.
The average daily UPI transactions increased to 802 million in September from 791 million in August, with the average daily transaction value rising to ₹97,913 crore from ₹96,205 crore. The decline in monthly volumes and value comes amid debate over the new UPI Merchant Discount Rate (MDR) framework, set to be implemented from October 15. Under this, person-to-merchant transactions above ₹2,000 will attract a 0.4% MDR, capped at ₹300 for transactions above ₹75,000, while person-to-person payments remain free.
The MDR framework has raised concerns among retailer groups who warn that the charges could discourage businesses from accepting UPI payments, especially during the festive season when transaction values tend to be higher than ₹2,000. This marks a shift in the UPI ecosystem, which has seen rapid growth in volumes and values over recent years, with the 23% year-on-year increase in September slightly higher than the 22% recorded in August.
The new MDR charges will take effect from October 15, as notified by the Centre. Retailers and merchants will be closely monitoring the impact of these fees on UPI adoption during the upcoming festive period, which is critical for transaction volumes and values.