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UPI MDR could add up to Rs 2,000 crore revenue for PhonePe, Rs 550 crore for Razorpay: Analysts

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UPI MDR could add up to Rs 2,000 crore revenue for PhonePe, Rs 550 crore for Razorpay: Analysts

UPI MDR could add up to Rs 2,000 crore revenue for PhonePe, Rs 550 crore for Razorpay: Analysts

PhonePe could add ₹1,600-2,000 crore and Razorpay ₹300-550 crore in annual revenue by FY28, as the new 0.4% MDR creates a potential ₹18,000-22,000 crore eligible UPI fee pool, analysts estimate.

PhonePe could add as much as ₹2,000 crore in annual revenue from the new UPI Merchant Discount Rate (MDR) framework by FY28, while Razorpay could gain up to ₹550 crore, according to estimates by analysts based on their respective exposure to eligible UPI transactions . The two fintechs, both preparing for potential public listings, stand to benefit differently: PhonePe's upside comes primarily from its dominant UPI app-provider position, while Razorpay's gain depends on its eligible merchant TPV and the share of acquiring economics it retains. “The overall UPI MDR pool could be in the ₹20,000-25,000 crore range annually at scale. PhonePe is clearly the biggest beneficiary given its ~48% share of UPI value, but it will only capture a portion of the overall pool. For PhonePe, I would see several hundred crore of incremental annual revenue as a reasonable medium-term opportunity, with the potential to move towards ₹1,000 crore or more as the eligible pool scales,” said Aakash Agrawal, Associate Director – Digital and New Age Business, Anand Rathi Investment Banking. Advt

PhonePe: ₹1,600-2,000 crore revenue opportunity The estimates become significantly larger when the new MDR is applied to PhonePe's eligible transaction base rather than its overall UPI market share. Naresh Biyani, Founder and CEO of Capwise Financial Services, estimates the eligible UPI value for PhonePe at around ₹20 lakh crore in FY27, rising to ₹25 lakh crore in FY28.


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