'Lowest In World': PhonePe CEO Sameer Nigam Backs 0.4% MDR

PhonePe aims to expand the reach of the Unified Payments Interface (UPI) to one billion users over the next decade, Founder and Chief Executive Officer Sameer Nigam said, calling for the restoration of merchant discount rates (MDR) to sustain India's digital payments ecosystem.

Speaking at a media event, Nigam argued that payment platforms needed viable revenue models to support continued investment.

He said a proposed MDR of 0.4%, attributed to the National Payments Corporation of India (NPCI), would remain among the lowest globally.

Questions UPI Market Share Cap

Nigam said rising cybersecurity, know-your-customer (KYC) compliance and fraud prevention expenses made payment charges necessary.

Rejecting suggestions that MDR primarily benefited foreign companies, he noted that most of the approximately 200 participants in the payments ecosystem were Indian.

PhonePe had invested around $1.7 billion-$1.8 billion over the past decade to develop its UPI business, he said.

Nigam also questioned the proposed 30% market share ceiling for third-party UPI applications, scheduled for implementation in December 2026.

He argued that the restriction was introduced six years earlier amid WhatsApp's entry, when market conditions differed considerably.

More than 100 third-party UPI applications now operate, he said, maintaining that PhonePe's market position had not discouraged investment.

Nigam added that the company would comply with any regulatory direction restricting new customer onboarding, despite opposing such a move.

PhonePe is also expanding its UPI services for feature phone users. Nigam said the service, introduced three months earlier, currently processed approximately 300,000 transactions monthly.

He expects transaction volumes to reach one million per month by December.

Beyond payments, PhonePe plans to broaden access to affordable credit and expand its international operations following its launch in the United Arab Emirates (UAE).

The company also intends to introduce affordable insurance, pension and investment products.

Nigam maintained that sustainable payment revenues would help companies invest in security, innovation and wider financial access.