UPI MDR to Accelerate PhonePe’s IPO Plans?

Fintech major PhonePe is looking to accelerate its plans for an initial public offering as the new Merchant Discount Rate framework for UPI payments creates an additional revenue stream for the digital payments ecosystem. A 0.4% MDR will apply to specified merchant UPI transactions above ₹2,000. The revenue will be shared among participants in the payments ecosystem, including banks, payment service providers and UPI application providers. PhonePe co-founder and CEO Sameer Nigam said the new revenue stream could bring the company closer to its IPO plans.

PhonePe had earlier deferred its IPO process amid global uncertainties and investor sentiment. The company is now looking at a potential public listing within the current financial year, according to Nigam. PhonePe accounts for more than 45% of UPI transactions in India, according to the company. With UPI MDR set to generate revenue for participants in the payments ecosystem, the impact of the new framework on PhonePe’s business and IPO plans is being closely watched.