UPI Charges May Return For High-Value Transactions: Govt Weighs Two Options
- The Indian government is considering reinstating Merchant Discount Rates for high-value Unified Payments Interface transactions or introducing a tiered incentive system to gradually reduce government support and sustain the UPI ecosystem by 2026-27.
- Since the zero-MDR policy started in January 2020, core revenue streams for the UPI ecosystem have disappeared, with government incentives covering only about Rs 2,000 crore against estimated industry operational costs of Rs 20,700 crore.
- The Parliamentary Standing Committee warned that delays in implementing statutory provisions for levying MDR on high-value transactions threaten payment providers' investments in cybersecurity, fraud prevention, and network infrastructure.
- Finance Minister Nirmala Sitharaman confirmed that any MDR charges would apply only to merchants exceeding a high transaction threshold, with consumers and small businesses exempt, and rates would be nominal and below card transaction fees.
13 Articles
13 Articles
MDR on UPI soon? Parliamentary Panel recommends expeditious introduction on high-value transactions
Commenting on the incentive programme for promoting RuPay Debit Cards and low-value BHIM-UPI transactions, the Committee noted that the budgetary allocation of Rs 2,000 crore to compensate for losses arising from the zero-MDR regime unnecessarily increases the Department's Demand for Grants
India's Unified Payments Interface (UPI) is now moving in the direction of increasing its reach across the country's borders. The National Payments Corporation of India (NPCI), which manages UPI, is planning to develop a global payment network by focusing on Indians living around the world i.e. NRIs and the Indian diaspora. The main objective of this initiative is to promote fast and easy digital payments between India and other countries. Dilip…
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