UPI charges from October 15; Activate’s maiden fund

Happy Wednesday! The NPCI has announced charges on select UPI merchant payments. This and more in today's ETtech Morning Dispatch.

Also in the letter:
■ Premji Invest in talks to back Let’s Try
■ Moneyview cuts IPO fresh issue size
■ Meta's new child safety measures

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NPCI announces MDR for UPI; merchant transactions above Rs 2,000 to attract 0.4% charge

The National Payments Corporation of India (NPCI) on Tuesday announced merchant discount rate (MDR) for Unified Payments Interface (UPI) transactions. It said that a 0.4% charge will be levied on person-to-merchant payments above Rs 2,000.

ET had exclusively reported on July 16 that the government would restore MDR on UPI transactions.

Key details:

• MDR will take effect on October 15.
• Consumer charges: Consumers will not pay the MDR.
• P2P transfers: Remain free regardless of transaction value.
• Railways, telecom, insurance, fuel: Flat Rs 5 MDR on payments above Rs 2,000.
• Capital market transactions: 0.02% MDR capped at Rs 300.

Yes, and: Small merchants in the person-to-person-merchant (P2PM) category will remain zero MDR even for transactions above Rs 2,000 if QR-based UPI payments made directly to their accounts stay within Rs 1 lakh per month. Crossing that threshold for three consecutive months will move a merchant to the P2M category.

Tell me more: NPCI said MDR would remain within the UPI ecosystem.

• Under the final fee flow, merchants will pay acquiring banks up to 0.4%.
• Acquirers will pay issuing banks 0.28% as interchange.
• Issuers will pay payer payment service providers (PSPs) 0.12%, of which PSPs will pass 0.08% to app providers such as PhonePe or Google Pay.
• This leaves 0.12% with the acquirer, 0.16% with the issuer, 0.04% with the payer PSP and 0.08% with the app provider.
• Merchant-side payment aggregators such as Razorpay and Cashfree would negotiate their share with acquiring banks.

Why it matters: Brokerage firm Bernstein had earlier estimated that a 40-bps MDR applied to half of UPI merchant-payment value could create a Rs 22,000-crore revenue pool by 2027-28.

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AI-focused VC firm Activate closes maiden fund at $105 million

Aakrit Vaish (left) and Pratyush Choudhury, cofounder, Activate

Aakrit Vaish’s AI-focused venture capital firm Activate has raised $105 million (about Rs 1,000 crore) for its maiden fund, less than a year after its launch in December 2025.

The details:

• The investment platform comprises an $85 million early-stage fund and $20 million deployed through dedicated growth-stage vehicles.
• The early-stage fund closed at 125% above its original target, Vaish told ET.
• The fund has made 10 investments since its first close in December 2025.
• Seven of these are early-stage investments, while three are growth-stage bets in frontier model startup Sarvam AI and voice AI firms ElevenLabs and Wispr Flow.
  

Growing opportunity: Vaish said the opportunity for specialist AI funds in India is still developing, but the number of high-quality AI investments is growing. He estimated that India-centric, top-tier seed AI investments could rise to 25-30 this year from about 12 in 2025.

Promising sectors: Vaish sees the largest opportunities in three segments. “One is largely consumer tech and AI. I think consumer AI in India is going to be the new version of financial services, ecommerce, health tech, and edtech. As you build out new versions of consumer tech, they will all get AI-native.” The other two are AI services and frontier AI.

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Premji Invest in talks to lead Rs 200-300 crore funding round in Let’s Try

Nitin Kalra, founder and CEO, Let's try

Premji Invest, the family office of Wipro founder Azim Premji, is in talks to lead a Rs 200-300 crore funding round in homegrown snacks brand Let’s Try, sources told us.

Deal details:

• The round will be a mix of primary and secondary transactions.
• It is expected to value the Delhi-NCR-based packaged snacks brand at Rs 1,000-1,200 crore, a person in the know said.
• This would be a jump from its last valuation of around Rs 300 crore, at which it raised capital in 2025.

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Canada’s OTPP invests another $40 million in Darwinbox: Sources

Teachers’ Venture Growth (TVG), the late-stage investment platform of Ontario Teachers’ Pension Plan (OTPP), has made a follow-on investment in Hyderabad-based HR software firm Darwinbox, about a year after its initial financing.

Number-wise: The new round is of around $40 million, bringing TVG’s total investment in the company to roughly $80 million, sources told us.

In August 2025, the company had closed a $40 million round with OTPP in a mix of primary and secondary transactions at a blended valuation of around $1 billion.

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Other Top Stories By Our Reporters

Puneet Agarwal, CEO, Moneyview

Moneyview cuts IPO fresh issue size: Accel-backed fintech lender Moneyview has halved the fresh issue component of its proposed initial public offering (IPO) to Rs 750 crore from Rs 1,500 crore, while also reducing the number of shares to be sold by existing investors, according to an addendum filed on Monday.

Meta's new child safety measures: Social media giant Meta has agreed to report child sexual abuse cases to the appropriate law enforcement agencies in India, government sources said on Tuesday. While the move is the first step towards making the platforms safe for children, they said much more needs to be done.

Coforge begins chairman search: Mid-tier IT firm Coforge has enlisted executive search firm Egon Zehnder to find a new chairman and two independent directors. Last week, chairman Om Prakash Bhatt and nomination and remuneration committee (NRC) chairperson DK Singh had stepped down amid board unrest.

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Global Picks We Are Reading

■ Time for a pause on cutting-edge AI (FT)

■ Where in the world is the iPhone cheapest? (Rest of World)

■ AI models need more data about biology, and OpenAI is paying to create it (MIT Technology Review)