UPI MDR: we're debating the wrong problem

Everyone is debating whether #UPI should have #MDR.
I think we're debating the wrong problem.

The real question is:
Why should India's biggest payment network be funded through transaction charges in the first place?
#Visa, #MasterCard do this; doesn't mean UPI also needs to follow their path!

Here's a different way to think about it.
Instead of charging merchants every time someone makes a payment, what if every active UPI user paid a small annual membership fee?

Before you dismiss the idea, hear me out.

UPI today has over 55 crore unique users.
Even a nominal annual membership could generate thousands of crores every year, enough to support the various participants in the ecosystem.
The regulator can always cap the maximum fee, preventing misuse or cartelization.

Why do I believe this model is worth discussing?
✅ Protect #merchant acceptance
UPI's biggest strength isn't that it's free.
It's that almost every merchant accepts it.
We've already seen many merchants disable #RuPay #CreditCards on UPI because of MDR.
Once merchants start associating a payment method with additional costs, acceptance suffers.
Let's not repeat the same mistake with UPI.

✅ Predictable #revenue for the ecosystem
Instead of depending on transaction-based charges, everyone knows how the ecosystem is funded.
Stable infrastructure needs stable revenue.

✅ Encourage #competition naturally
#RBI has been trying to reduce concentration in the UPI ecosystem through the 30% market share cap.
A membership model could achieve the same objective through market forces.
Large PSPs may decide to recover the cost from some users.
New entrants may choose to absorb it to attract customers (price-sensitive users)
Competition does the balancing instead of regulation.

✅ Reduce unnecessary #duplication
Today, many people have accounts on 4-5 UPI apps but actively use only one or two.
A membership model encourages users to keep only the apps they genuinely use, reducing unnecessary load on the ecosystem.

The exact pricing is debatable, and regulators can decide on that.
But this model almost kills all the noise created by #influencers!

If you were designing UPI from scratch today, how would you fund it without hurting adoption, merchant acceptance, or innovation?