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UPI MDR rollout pushed; India’s first quantum computer coming soon
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Happy Wednesday! The implementation of MDR on select UPI payments has been deferred. This and more in today’s ETtech Morning Dispatch.
Also in the letter:
■ Urban Company to consider fundraise
■ ETtech Done Deals
■ DealShare CEO quits
Implementation of the merchant discount rate (MDR) on select UPI (Unified Payments Interface) transactions has been pushed beyond Diwali, and a final date will be communicated soon to stakeholders, the National Payments Corporation of India (NPCI) said in a statement on Tuesday.
The plan: The UPI MDR framework, announced on September 15 by NPCI, was scheduled to take effect on October 15. It prescribed a 0.4% fee on UPI merchant payments above Rs 2,000, capped at Rs 300 per transaction.
Merchant pushback: The postponement follows representations from merchant associations seeking relief during the ongoing festive sales season. Besides deferment, they also sought a higher exemption threshold for small merchants, and exemption for merchant-to-merchant transactions.
Per the September framework, merchant payments of up to Rs 2,000 and person-to-person transfers remain free. Qualifying small merchants are also exempt, and merchants cannot pass on the fee to customers.
Tell me more: The introduction of MDR marks a shift from the zero-MDR framework under which merchants have not been charged for accepting bank account-based UPI payments. Instead, the government compensated banks and payment companies through an incentive scheme for low-value UPI and RuPay debit-card transactions.
.jpg "UPI Upswing - 3 (1)")
The government has budgeted about Rs 2,000 crore for UPI and RuPay incentives in FY27, significantly below the estimated cost of operating the UPI ecosystem. No subsidy has been paid since April 2025.
Sandip Patel, India and South Asia Managing Director, IBM
IBM plans to deploy what it describes as India’s largest quantum computer early next year at the newly developed tech park in Amaravati, Andhra Pradesh.
Driving the news: “I think the facility is almost ready… Machines should be here early next year,” Sandip Patel, managing director of IBM India, told ET.
“So these are the kinds of use cases which I think we need to start developing with quantum and some of that work will start happening from India,” Patel said.
Abhiraj Singh Bhal, cofounder and CEO, Urban Company
The board of home services platform Urban Company will meet on October 16 to consider a fresh fundraise, according to an exchange filing. Among the fundraising routes it will consider is a qualified institutional placement (QIP), the filing said.
IPO proceeds: The company raised Rs 472 crore through its initial public offering (IPO) in September 2025. As of June 30, the company had Rs 2,019 crore in cash on its books, even as its InstaHelp business continued to weigh on its bottomline.
Competition: Urban Company is competing with Snabbit and Pronto in the instant househelp segment. Snabbit has raised a total of $112 million, including a $56-million round closed in April 2026. Pronto, meanwhile, has raised more than $50 million.
Cash burn: During the April-June quarter, UC’s InstaHelp business generated Rs 11 crore in revenues and reported adjusted operating losses of Rs 132 crore. The company said at the time that losses in the segment were expected to remain high.
(L=R) Tapan Ranjan, Om Misra, and Harsh Garg, cofounders, Spill Games
Bengaluru-based mobile gaming startup Spill Games has raised $10.5 million in a round led by Elevation Capital, with existing investors Centre Court Capital and PeerCapital also participating.
The details: Founded in 2024 by Om Misra, Tapan Ranjan, and Harsh Garg, Spill develops free-to-play casual, puzzle, and hybrid-casual mobile games for global markets.
It will use the capital to market and acquire users for successful titles such as “Cozy Finds: Hidden Objects,” a hidden-object puzzle, and “Cozy Finds: Differences,” a spot-the-difference game, among others.
(L-R) Neel Balar, Prajwal Prakash and Akash Anand, cofounders, Clueso
Clueso, an AI video creation startup founded by IIT Madras alumni, has raised $10 million in a round led by Dharana Capital.
Round details: More than 80% of the fresh capital came from existing investors, the company said, taking its total capital-raise to $12 million.
Clueso is building a platform that allows enterprises to automate the production and updating of videos used for marketing, customer education, employee training, and sales enablement.
.jpg "1676459845116 (1)")
Kamaldeep Singh, CEO, Dealshare
DealShare CEO quits: Kamaldeep Singh has stepped down as chief executive of ecommerce startup DealShare, which is in talks to be acquired by online pharmacy Truemeds at a fraction of its peak valuation, marking another senior leadership exit at the troubled company.
Rs 7,131 crore RDI deployment: Chiratae Ventures, Blume Ventures, Kalaari Capital, Speciale Invest, YourNest Capital, IvyCap Ventures, Ideaspring Capital and TVS Capital Funds are among the 19 fund managers in the first cohort of the government’s Rs 1 lakh crore Research, Development and Innovation (RDI) scheme.
Freshworks to acquire Torii: Software-as-a-service company Freshworks said it will acquire New York-based SaaS management platform Torii to expand its Freshservice offering to software management and artificial intelligence (AI) spending governance.
■ Will Accenture survive or thrive in the age of AI? (FT)
■ The UAE embraces AI for kindergartners (Rest of World)
■ Leading-edge AI models are losing their allure with developers (The Information)
Also in the letter:
■ Urban Company to consider fundraise
■ ETtech Done Deals
■ DealShare CEO quits
UPI MDR rollout deferred beyond Diwali
Implementation of the merchant discount rate (MDR) on select UPI (Unified Payments Interface) transactions has been pushed beyond Diwali, and a final date will be communicated soon to stakeholders, the National Payments Corporation of India (NPCI) said in a statement on Tuesday.
The plan: The UPI MDR framework, announced on September 15 by NPCI, was scheduled to take effect on October 15. It prescribed a 0.4% fee on UPI merchant payments above Rs 2,000, capped at Rs 300 per transaction.
Merchant pushback: The postponement follows representations from merchant associations seeking relief during the ongoing festive sales season. Besides deferment, they also sought a higher exemption threshold for small merchants, and exemption for merchant-to-merchant transactions.
Per the September framework, merchant payments of up to Rs 2,000 and person-to-person transfers remain free. Qualifying small merchants are also exempt, and merchants cannot pass on the fee to customers.
Tell me more: The introduction of MDR marks a shift from the zero-MDR framework under which merchants have not been charged for accepting bank account-based UPI payments. Instead, the government compensated banks and payment companies through an incentive scheme for low-value UPI and RuPay debit-card transactions.
The government has budgeted about Rs 2,000 crore for UPI and RuPay incentives in FY27, significantly below the estimated cost of operating the UPI ecosystem. No subsidy has been paid since April 2025.
IBM to deploy India’s first quantum computer in Amaravati early 2027
IBM plans to deploy what it describes as India’s largest quantum computer early next year at the newly developed tech park in Amaravati, Andhra Pradesh.
Driving the news: “I think the facility is almost ready… Machines should be here early next year,” Sandip Patel, managing director of IBM India, told ET.
- The facility will focus on developing practical quantum applications and helping Indian enterprises prepare for post-quantum cryptography.
- The project is part of IBM’s Andhra Pradesh Quantum Valley initiative, executed in partnership with Tata Consultancy Services.
“So these are the kinds of use cases which I think we need to start developing with quantum and some of that work will start happening from India,” Patel said.
Urban Company eyes Rs 2,500 crore QIP amid cash-intensive househelp battle
The board of home services platform Urban Company will meet on October 16 to consider a fresh fundraise, according to an exchange filing. Among the fundraising routes it will consider is a qualified institutional placement (QIP), the filing said.
IPO proceeds: The company raised Rs 472 crore through its initial public offering (IPO) in September 2025. As of June 30, the company had Rs 2,019 crore in cash on its books, even as its InstaHelp business continued to weigh on its bottomline.
Competition: Urban Company is competing with Snabbit and Pronto in the instant househelp segment. Snabbit has raised a total of $112 million, including a $56-million round closed in April 2026. Pronto, meanwhile, has raised more than $50 million.
Cash burn: During the April-June quarter, UC’s InstaHelp business generated Rs 11 crore in revenues and reported adjusted operating losses of Rs 132 crore. The company said at the time that losses in the segment were expected to remain high.
Spill Games raises $10.5 million led by Elevation Capital
Bengaluru-based mobile gaming startup Spill Games has raised $10.5 million in a round led by Elevation Capital, with existing investors Centre Court Capital and PeerCapital also participating.
The details: Founded in 2024 by Om Misra, Tapan Ranjan, and Harsh Garg, Spill develops free-to-play casual, puzzle, and hybrid-casual mobile games for global markets.
It will use the capital to market and acquire users for successful titles such as “Cozy Finds: Hidden Objects,” a hidden-object puzzle, and “Cozy Finds: Differences,” a spot-the-difference game, among others.
AI video creation startup Clueso raises $10 million
Clueso, an AI video creation startup founded by IIT Madras alumni, has raised $10 million in a round led by Dharana Capital.
Round details: More than 80% of the fresh capital came from existing investors, the company said, taking its total capital-raise to $12 million.
Clueso is building a platform that allows enterprises to automate the production and updating of videos used for marketing, customer education, employee training, and sales enablement.
Other Top Stories By Our Reporters
DealShare CEO quits: Kamaldeep Singh has stepped down as chief executive of ecommerce startup DealShare, which is in talks to be acquired by online pharmacy Truemeds at a fraction of its peak valuation, marking another senior leadership exit at the troubled company.
Rs 7,131 crore RDI deployment: Chiratae Ventures, Blume Ventures, Kalaari Capital, Speciale Invest, YourNest Capital, IvyCap Ventures, Ideaspring Capital and TVS Capital Funds are among the 19 fund managers in the first cohort of the government’s Rs 1 lakh crore Research, Development and Innovation (RDI) scheme.
Freshworks to acquire Torii: Software-as-a-service company Freshworks said it will acquire New York-based SaaS management platform Torii to expand its Freshservice offering to software management and artificial intelligence (AI) spending governance.
Global Picks We Are Reading
■ Will Accenture survive or thrive in the age of AI? (FT)
■ The UAE embraces AI for kindergartners (Rest of World)
■ Leading-edge AI models are losing their allure with developers (The Information)
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I agree to receive newsletters and marketing communications via e-mail