MDR framework fuels PhonePe’s push into tier‑6 towns

The recent introduction of India’s Merchant Discount Rate (MDR) framework has opened a pathway for PhonePe to invest heavily in its merchant network. Leveraging a 5 % allocation from the MDR pool, the company has created a dedicated fund to support hiring, device rollout and merchant education.

This financial engine enables PhonePe to recruit over 20,000 new frontline sales representatives and install millions of POS and smart‑speaker devices, with a sizeable share directed toward tier‑6 towns and distant villages. The initiative aligns with the government’s goal of extending digital payment services to every corner of the nation.

Simplified labour regulations introduced last year have also accelerated onboarding, allowing PhonePe to scale its on‑roll workforce swiftly. The combined effect of the MDR‑driven fund and regulatory ease positions PhonePe to bridge gaps in financial inclusion, bring more merchants into the formal economy and unlock credit opportunities for small enterprises.