MUDIT JAIN
TF Buzz
If UPI is free why do apps encourage people to use their app for UPI payments?
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Why do applications give cashback on UPI and encourage UPI transactions through their app
- Thread starter MUDIT JAIN
- Start date
Abhishek012
TF Pioneer
This is business. 🤣🤣
Merchant UPI is not free govt pay 0.4% MDR fees for all UPI transactions. Credit card link UPI also charged 1.5% to 3% MDR (depend on merchant categories) for every payment above Rs2001.
Some people also think banks earn through MDR but in reality issuer banks get only 60% of the MDR fees means max 1% to 1.2% per transactions + many 3rd party technology service providers also involve on issuer bank's card transactions but as you know, we got more than 1% cashback on credit card spend.
Banks earned money from different ways.
Revenue and market share are important for startup companies. Profit or loss is not important.
UPI apps will earn profit in future through different businesses.
2 years back, Phonepe CEO said PhonePe will earn money from UPI International. Many countries like Nepal will adopt UPI and there Phonepe/GooglePay will earn.
UPI apps also use our data to sell different different services like mutual funds, insurance, bill payment, In-app payments etc.
Merchant UPI is not free govt pay 0.4% MDR fees for all UPI transactions. Credit card link UPI also charged 1.5% to 3% MDR (depend on merchant categories) for every payment above Rs2001.
Some people also think banks earn through MDR but in reality issuer banks get only 60% of the MDR fees means max 1% to 1.2% per transactions + many 3rd party technology service providers also involve on issuer bank's card transactions but as you know, we got more than 1% cashback on credit card spend.
Banks earned money from different ways.
Revenue and market share are important for startup companies. Profit or loss is not important.
UPI apps will earn profit in future through different businesses.
2 years back, Phonepe CEO said PhonePe will earn money from UPI International. Many countries like Nepal will adopt UPI and there Phonepe/GooglePay will earn.
UPI apps also use our data to sell different different services like mutual funds, insurance, bill payment, In-app payments etc.
Cred is the new one on block giving cashback to get more users to use their UPI option. Reasons covered properly in the post above.
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