The End Of Free UPI, Fibe IPO Gets SEBI Nod & More

UPI Gets MDR Makeover

After a decade of free UPI payments, NPCI will now impose an MDR for select high-value transactions starting October 15. The move marks UPI’s most consequential monetisation shift yet. Can the infrastructure commercialise without compromising its inclusivity?

The New UPI Math: Under the framework, P2M UPI payments above ₹2,000 will attract an MDR of 0.4%, capped at ₹300 for transactions of ₹75,000 and above. The charge will apply to merchants, not customers. Banks have been instructed to prevent merchants from passing on the costs to end users. 

Meanwhile, P2P payments remain free, while small merchants receiving up to ₹1 Lakh a month through QR-code transactions will continue to face zero MDR.

Paying For The Rails: The policy acknowledges a reality UPI has long deferred. Transaction volumes are setting new records, but infrastructure, cybersecurity and operational expenses are rising alongside them. MDR revenue will be split among issuer banks, payment service providers and app providers. This will create a clearer financial incentive for the ecosystem to maintain and upgrade the network that supports billions of transactions every month.

A Boost For Fintechs: For fintechs, MDR could finally turn UPI scale into a predictable revenue opportunity. The existing market has for years struggled to build viable economics. A shared revenue pool could fund fraud detection, encryption and rural payment infrastructure, while reducing the sector’s dependence on annual government incentives. 

The Merchant Question: The framework protects small merchants on paper, but larger businesses will now have to absorb a new cost of accepting UPI payments. The risk is that merchants may find indirect ways to recover it through pricing, even if direct pass-through is prohibited. 

All said and done, the viability of the regime and its impact on inclusivity will be tested at the checkout counter. So, what does this new MDR regime mean for India’s digital payments ecosystem? Let’s find out…

From The Editor’s Desk

Fibe Gets SEBI Nod For IPO

• The markets regulator has given its nod to the lending tech startup to move ahead with its public issue. SEBI issued its final observation on the offer documents of Fibe parent Social Worth Technologies Ltd yesterday.
• Fibe filed its DRHP with the market regulator in June for an IPO, which will comprise a fresh issue of shares worth up to ₹750 Cr and an offer-for-sale component of more than 4 Cr equity shares. TPG and Norwest will offload their stakes in the OFS.
• Founded in 2015, Fibe operates a lending platform that offers personal loans and purpose-driven financing solutions. Having raised $300 Mn to date, the startup closed FY26 with a profit of ₹257.5 Cr against an operating revenue of ₹1,584.6 Cr.

Flam Nets $40 Mn

• The AI-powered content platform has raised around ₹383 Cr in its Series B round led by QED Investors. The round also comprised a “small” secondary transaction. 
• Founded in 2021, Flam enables enterprises to create immersive, interactive experiences for marketing and product visualisation. The startup claims to hold more than 15 patents and caters to 100 customers globally. It is eyeing $100 Mn in ARR by next year. 
• The fundraise comes as the concept of mixed reality is gaining traction as D2C and ecommerce players deploy XR  offerings for marketing and engaging their audiences. The broader Indian AR market is projected to become a $11 Bn opportunity by 2031.

Rebel Foods’ FY26 Show

• The cloud kitchen unicorn managed to trim its net losses by 16.3% YoY to ₹281.8 Cr in FY26. This came on the back of operating revenue rising 20.7% YoY to ₹1,951.6 Cr in the fiscal under review.
• Buoyed by stronger engagement, continued improvements across the board and margin expansion, Rebel Foods also managed to narrow its EBITDA by 50% YoY to ₹62.4 Cr in FY26. However, expenses continued to bite and rose 14.1% YoY to ₹2,265 Cr.
• Founded in 2011, Rebel Foods operates 45+ food brands and serves customers across 120+ cities in India, the UAE and the UK. It has raised $773 Mn in funding to date. It has also been recalibrating its financial and operational strategy with an eye on an IPO soon.

PayU’s Legal Battle With Visa

• The Delhi HC has directed the RBI to mediate a dispute involving the Prosus-owned fintech platform, Visa and other acquiring banks. Till the next hearing on October 27, the HC directed all parties to maintain status quo on claims arising from past transactions.
• The Court has also barred acquiring banks from making further deductions from PayU’s settlements while the mediation is underway. It also restrained Visa from issuing final determinations on pending IRF claims concerning past transactions.
• The case pertains to interchange reimbursement fee claims arising from the alleged misclassification of merchant category codes. PayU claims that it does not assign MCCs, adding that it is the responsibility of acquiring banks to assign the appropriate codes.

CCPA Orders Probe Into Apple

• The Central Consumer Protection Authority has ordered a detailed investigation into the OEM’s software warranty terms. This is part of wider probe into the iOS 18 update, which damaged iPhone functionality and compelled users to pay heavy sums for repairs.
• In response, Apple has publicly said that it primarily sells hardware and that no tech company across the globe offers warranty on software.
• Separately, CCPA has imposed a penalty of ₹10 Lakh on mobility unicorn Rapido for misleading advertisements, unfair trade practices and dark patterns. It is also under the radar for prompting users to pay more before their rides are confirmed.

Inc42 Markets

Inc42 Startup Spotlight

Can Serendipity Space Build A Pharma Factory In Orbit?

Drugs must be manufactured with consistent crystal structure, purity and stability. But gravity can complicate crystallisation on Earth. Serendipity Space is exploring whether microgravity can improve the process through autonomous pharmaceutical factories aboard satellites.

The Orbital Factory: Founded in 2024, Serendipity Space is developing reusable satellites for in-space pharmaceutical manufacturing. Its long-term plan is to process drug and protein compounds in low Earth orbit and return the resulting material to Earth.

The Alchemy Module: At the centre of the startup’s tech stack is Alchemy, an autonomous pharmaceutical-processing module designed to grow drug and protein crystals in microgravity. With less gravity-driven convection and sedimentation, the startup believes crystals could form more uniformly, potentially improving properties such as solubility, stability and formulation.

A Near-Space Proof Point: In March 2026, Serendipity Space flight-tested an orbital-class prototype from the Tata Institute of Fundamental Research’s Balloon Facility in Hyderabad. The stratospheric-balloon mission tested Alchemy’s autonomous operations, avionics, thermal protection and controlled recovery systems. 

Now focused on developing its satellite platform and autonomous crystallisation technology, can Serendipity make orbital pharmaceutical manufacturing a viable business?

Infographic Of The Day

New-age mithai wallahs are reinventing everything from packaging to flavour, while legacy names like Haldiram’s, Bikaji and Jiwaram hold their ground as the OGs of the category. So, why is India’s packaged sweets market booming?

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