Major Indian food delivery and quick commerce platforms, including Zomato-parent Eternal and Swiggy, are expected to face a relatively minor financial impact if a Merchant Discount Rate (MDR) is introduced on Unified Payments Interface (UPI) transactions exceeding ₹2,000. This assessment, detailed in a report by Elara Securities, highlights that the typically low average order values (AOVs) for these services act as a significant buffer against such charges.
Minimal Impact for Eternal (Zomato & Blinkit)
For Eternal, which operates both Zomato's food delivery and Blinkit's quick commerce services, Elara Securities estimates an incremental MDR cost of approximately ₹182 million. This breaks down to ₹63 million for Zomato and ₹119 million for Blinkit. The combined financial burden is projected to be around 0.6% of Eternal's estimated FY27 EBITDA.
The analysis assumes a 0.4% MDR on UPI transactions above ₹2,000. Crucially, Zomato's average net order value (ANOV) is estimated at ₹381, while Blinkit's average order value (AOV) stands at ₹540. These figures mean that only a small fraction of transactions are likely to cross the ₹2,000 threshold, thus limiting exposure to the potential MDR.
Swiggy's Exposure Also Limited
Swiggy's operations, including its food delivery and Instamart quick commerce, are anticipated to experience a similarly contained impact. Swiggy's food delivery ANOV is estimated at ₹405, with Instamart's AOV at ₹518. Elara projects a combined incremental MDR cost of ₹86 million for Swiggy, with ₹47 million from food delivery and ₹39 million from Instamart.
Overall, the potential MDR impact on Swiggy's consolidated EBITDA is estimated at approximately 0.4%. This reinforces the finding that high digital payment adoption alone does not necessarily translate into a large MDR burden; transaction values are the key factor.
Higher Impact for Large-Ticket Businesses
In contrast, businesses characterized by higher average transaction values are expected to face a more substantial impact. The report indicates that Nykaa could see an EBITDA impact of 2.6%, and DMart approximately 2.1%. Elara estimates Nykaa's incremental MDR cost at around ₹299 million, while DMart might incur an estimated ₹1.27 billion in costs under the same assumptions.
Mitigation Strategies Available
Elara's analysis initially assumes that merchants and platforms would absorb the MDR costs. However, companies possess various levers to offset these expenses. If the cost were eventually passed on to consumers, the direct EBITDA impact on the platforms could be reduced. Other potential offsets include leveraging advertising revenue, enhancing operational efficiencies, implementing higher platform fees, or making modest adjustments to take rates. These strategies could help companies manage any additional costs if a UPI MDR is formally introduced.