Mar 25, 2025

UPI’s MDR Debate Heats Up Again Fintech startups have again voiced concerns over the zero MDR regime for UPI payments. Caught between increasing deployment costs and compliance expenses, industry stakeholders have sought Prime Minister Narendra Modi’s intervention on the policy that was introduced to promote the UPI ecosystem. Last week, the union cabinet cleared an INR 1,500 Cr scheme to incentivise BHIM and UPI transactions (under INR 2,000) for FY25, which is already 60% lower than FY24’s outlay of INR 3,500 Cr. According to the Payments Council of India (PCI), the allocation of INR 1,500 Cr is insignificant compared to the INR 10,000 Cr needed annually to sustain and grow UPI services. What’s The Solution? Instead of pushing for a higher incentive allocation, the council seeks to introduce MDR for online payments at a flat 0.3% rate for large UPI merchants. Taking the example of the US, where an MDR typically ranges from 1% to 3%, the PCI claims that over 90% of merchants in India will be unaffected by the move as large players account for just 50 Lakh out of the 6 Cr total UPI merchant base. The Regulatory Standoff: While the Centre has been against the proposal of levying an MDR , the RBI has maintained a middle ground, even pitching for a tier-based approach to MDR for UPI payments. As UPI payments continue to grow manifold annually, fintechs continue to pay as much as INR 2 on every transaction from their pocket, without a discernible revenue stream. Amid the tug-of-war between fintechs and the Indian government on MDR, let’s steal a glance at what’s got PCI triggered yet again. Continue reading… From The Editor’s Desk Meesho’s Lines Up Bankers For IPO: The ecommerce unicorn has picked Morgan Stanley, Kotak Mahindra Capital and Citi as advisers for its upcoming IPO. Meesho, which has already moved to shift its domicile to India, is looking to raise $1 Bn via the public listing. ONDC Crosses 200 Mn Transactions: The state-backed network has crossed the milestone within just two years of its inception. While ONDC took 20 months to clock 100 Mn transactions, it achieved the next 100 Mn in just six months. Amazon India Slashes Referral Fee: The ecommerce giant has reduced the seller referral fees to zero for more than 12 Mn products, priced below INR 300. Starting April 7, the company will also trim its national shipping rates by as much as 16%. Shiprocket’s Expansion Spree: The logistics unicorn has expanded its same-day delivery service to Bengaluru to offer quick deliveries to MSMEs. Shiprocket already offers the service in Delhi NCR, Mumbai, Kolkata and Hyderabad. Groyyo Acquires Majority Stake In Oussum: The B2B manufacturing and supply chain enablement startup has acquired a majority stake in the New York-based online women’s wear company for an undisclosed amount. The move will help Groyyo boost its presence in the US. Milind Sharma Returns To Delhivery: The logistics major has announced the appointment of Sharma as the head of its rapid commerce and D2C brand verticals. A founding member of Delhivery, Sharma left the company to start his own logistics venture NuvoEx in 2013. Foxconn-HCL’s Semiconductor Plans: The two companies are in talks with L&T and Taiwan-based CTCI as an engineering partner for their upcoming OSAT facility in Uttar Pradesh. Foxconn plans to invest INR 424 Cr in the JV with HCL Group. Honasa, Unicommerce Shares Soar: The D2C unicorn’s stock zoomed 11% to an intraday high at INR 244.40 on March 24 on the back of a rally in the broader markets. Meanwhile, Unicommerce shares also closed 8.9% higher at INR 134.75 on the BSE . Inc42 Startup Spotlight Indians continue to fare poorly when it comes to oral health. As per a report, 64% of Indians suffer from dental stains while 48% deal with tooth decay. It was this problem statement that paved the way for Theranautilus. Founded in 2020 by Ambarish Ghosh, Peddi Shanmukh Srinivas and Debayan Dasgupta, the startup offers oral and dental treatments with the help of nanobots. Incubated at IISc, Theranautilusis developing magnetic nanorobots that can be precisely controlled inside the human body using external magnetic fields. These bots can be guided to form chains, which can move at high speeds inside microscopic tunnels within the body like dentin tubules. The Bengaluru-based startup has already conducted trials on animals and has been declared non-toxic at a cell level. Going forward, the startup plans to do human trials for its product and aims to launch its offering in the market by 2026. Moreover, it also plans to develop nanorobotic agents, which can help in curing cancer.