New UPI MDR Charges Impact High-Ticket Retailers Lenskart and FirstCry
What happened
A proposed 0.4% Merchant Discount Rate (MDR) will apply to Unified Payments Interface (UPI) transactions exceeding ₹2,000, beginning October 15. This charge, which merchants must bear, is set to increase operating costs for consumer internet companies and retailers like Lenskart and FirstCry.
From livemint.com
Why it matters
The new MDR represents a significant change from the zero-MDR regime that supported UPI adoption. Businesses where customers regularly spend more than ₹2,000, such as FirstCry, which reported an average order value of ₹2,284 in FY26, or Lenskart, which operates in high-ticket eyewear, could see higher impacts on profitability.
Lenskart operates in the smart eyewear market in India.
From livemint.com
Who's involved
- LenskartIndian eyewear e-commerce company facing increased transaction costs
- FirstCryIndian online retailer for baby and kids products with a high average order value
- Goldman SachsAmerican investment bank that holds equity shares in Lenskart
- SoftBank GroupJapanese company that holds equity shares in Lenskart
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- LenskartSpeculative
Lenskart could see higher operating costs due to the MDR charge, potentially affecting its profitability
- FirstCrySpeculative
FirstCry might face increased costs related to transactions exceeding the UPI threshold, impacting its retail margins
- Goldman SachsSpeculative
Goldman Sachs may see the valuation of its stake in Lenskart affected by increased operating costs
- SoftBank GroupSpeculative
SoftBank Group may see the valuation of its stake in Lenskart affected by increased operating costs