Fintech Brief — September 18, 2026
Today’s Top Stories
1. Government defends UPI MDR, denies US pressure — the fee fight turns political
The biggest payments story in years keeps escalating. Two days after NPCI’s September 15 circular introduced a merchant fee on UPI, the Finance Ministry and Department of Financial Services issued a detailed public defence, rejecting Opposition claims that the charge was introduced under US pressure following American complaints to the USTR about RuPay’s preferred access to UPI.
The government’s argument: the MDR creates a self-sustaining revenue model so that domestic payment apps other than the two market leaders can finally compete — noting that NPCI’s 2020 rule capping third-party apps at 30% market share could never be enforced precisely because there was no revenue to compete with. The Ministry also reiterated that only RuPay credit cards are permitted on UPI, calling it deliberate policy to build a domestic card network, not a concession to anyone.
What the framework actually does from October 15: a 0.4% MDR on person-to-merchant UPI payments above ₹2,000 (capped at ₹300 for transactions of ₹75,000+), a flat ₹5 fee on railways, telecom, insurance and fuel payments above ₹2,000, and a concessional 0.02% on capital-market payments like mutual funds and stockbroking. Small merchants receiving up to ₹1 lakh per month via UPI QR codes stay exempt — though those crossing that threshold for three consecutive months get bumped into the chargeable category. P2P transfers and payments up to ₹2,000 remain free, covering over 95% of UPI transaction volume.
The scale matters: UPI processed 24.51 billion transactions worth ₹29.82 lakh crore in August, and merchant payments above ₹2,000 were only ~4% of volume but ~67% of value — roughly ₹6 lakh crore a month. That’s the base the new fee taps. Industry reaction split along predictable lines: Pine Labs jumped 5% as investors priced in merchant-platform benefits, BharatPe backed the framework, and each ecosystem participant will contribute 5% of its MDR share to a small-merchant onboarding fund to be finalised with RBI within three months. Consumers pay nothing directly — but as we’ve argued in The True Cost of UPI, “free for consumers” has never meant costless.
2. Peak XV pockets ₹1,756 crore from Groww in bulk deal
Peak XV Partners (formerly Sequoia India) sold 9.17 crore shares — a 1.46% stake — in Groww’s parent Billionbrains Garage Ventures at ₹191.49 apiece, netting ₹1,756 crore on the NSE. The sale trims its holding from 15.68% to 14.22%, keeping it Groww’s largest public shareholder. It’s the latest in a series of early-investor monetisations in India’s newest brokerage heavyweight this year — watch for more block deals as pre-IPO investors de-risk.
3. RBI drains ₹2.4 lakh crore as banking liquidity stays bloated
The Reserve Bank absorbed ₹2.40 lakh crore via a variable-rate reverse repo auction, on top of announced open-market sales of ₹1 lakh crore in government securities across three tranches (₹50,000 crore on September 17, ₹25,000 crore each on September 21 and 28). The surplus — driven by FCNR(B) deposit inflows and government spending — has been dragging overnight money-market rates below the repo rate, and the central bank wants them aligned. For fintech lenders, watch funding costs: a tighter liquidity corridor feeds into CP and NCD pricing.
4. PB Fintech consolidates lending: full MyLoancare buyout, ₹10 crore into PB Wheels
Pb Fintech’s board approved acquiring the remaining 20% stake in MyLoancare for up to ₹5 crore — bringing the mortgage lender fully in-house by March 31 — and investing ₹10 crore in its vehicle-management arm PB Wheels. It’s a bet that owning the NBFC stack end-to-end, under RBI’s tightened NBFC and Account Aggregator compliance regime, beats marketplace referrals for credit-funnel economics.
Sources: The Hindu, Economic Times, Indian Express, Financial Express, Business Standard, ETBFSI, Entrackr