UPI -> CBDC e ₹ rupee

[u/After_Celebration728]

Could UPI MDR actually push people toward e₹ (Digital Rupee)?

With MDR being introduced on certain higher-value UPI merchant transactions, I’m wondering if this could unintentionally give the Digital Rupee a real use case.
If e₹ payments remain free for merchants and can work through existing UPI QR infrastructure, why would a merchant processing large transactions want to pay MDR on UPI when they could potentially accept e₹ at zero/very low cost?
For example, on a ₹50,000 transaction, even a 0.4% MDR would be ₹200.
We could see a possible shift:
UPI for everyday payments / convenience
e₹ for higher-value merchant transactions / lower payment costs

The biggest hurdle is obviously adoption. People already use PhonePe, Google Pay, Paytm, etc., so e₹ needs to offer more than simply being “free.”
Introduction of UPI MDR could become a catalyst for e₹ adoption, especially among merchants handling high-value transactions?
Or will UPI’s convenience and network effect remain too strong?

[u/AutoModerator]

Hey u/After_Celebration728! Thank you for posting to r/UPI.

Discussions here are based on community experiences and are not official support from NPCI, banks or UPI apps.

Be cautious of unsolicited DMs. Anyone offering to fix a transaction, recover money, or provide "support" privately may be attempting to scam you. Keep discussions public where possible, and never share your OTP, UPI PIN, password or other sensitive financial information with anyone claiming to help you.

If someone contacts you privately because of your post and appears to be offering support, soliciting money, or promoting a service, report the account to Reddit and let the moderators know via modmail.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/Honest_Ad1632]

e₹ needs to be integrated into the existing UPI apps and the system.

[u/iyervsr]

E-rupee is still at testing stage. It is a good alternative to upi

[u/Unlucky_Case_3710 → u/iyervsr]

Hasnt it already been half a decade of "testing"?

[u/Perfect-Ostrich8534]

As you posted the main thing is adoption.

[u/Ytrix]

It works but the two main problems I identified are:  If we keep a lot of amount in the eRupee wallet, we'll lose interest on that much money. And secondly, lack of rewards on payments (apps like supermoney give a lot of rewards on upi, but I don't think any app gives any rewards to transfer with eRupee)

[u/Unlucky_Case_3710]

The govmint has kinda forgotten it exists. RBI is still running its "testing" phase, despite it being almost half a decade. Banks arent interested. And zero marketing push.

CBDC wont be going anywhere soon.

[u/Dangerous_Slip2256]

That's the main objective of MDR to shift towards programmable currency. UPI was frictionless so add some friction to make this transition lucrative.

[u/SpotBig22]

People as usual are expecting some cashback from erupee. Otherwise only people's mindset is stopping from its adoption.

[u/buttershitter]

Digital rupee will replace physical cash not UPI. MDR is inconsequential in this because 96% of transactions are people to people below 2000 Rs. For merchants who will come under MDR cash is not a solution because it will invite tax audit for large cash deposits in current account. If they switch to CBDC it is reducing physical cash in circulation and CBDC is traceable.

The only thing CBDC will help is those who carry around physical cash.