IIT-B report recommends cutting UPI fees for payment apps, reducing bank share

An IIT-Bombay study has proposed lowering the Merchant Discount Rate (MDR) share for Third-Party Application Providers like PhonePe and Google Pay. It recommends setting their share at 0.06%, lower than the 0.08% suggested by the National Payments Corporation of India. The report advises keeping the Payment Service Provider share unchanged at 0.02%. It suggests banks should forgo part of their current revenue, as they currently receive 70% of the MDR split between issuing and acquiring banks.