What happens when merchants pass on UPI MDR costs to customers?
5 Articles
5 Articles
IIT-Bombay report recommends cutting UPI MDR from 0.4% to 0.08%; says banks should give up their share as they earned Rs 4.85 lakh crore from CASA deposits in FY26
The study recommends setting the MDR share for TPAPs at 0.06%, lower than the 0.08% proposed by the National Payments Corporation of India (NPCI), while keeping the PSP share unchanged at 0.02%. Under the existing arrangement, banks that issue and acquire transactions collectively receive the bulk of the revenue, with a 70% share split between them
MDR New Rule: The IIT Bombay study furthers the debate on the distribution of revenues and costs of digital payment systems. The final decision will rest with the government and relevant regulators.
UPI MDR May Push Costs Onto Consumers Despite Surcharge Ban: Report
Get latest articles and stories on Business at LatestLY. The revised fee framework for Unified Payments Interface (UPI) transactions could indirectly burden consumers through higher retail prices, even as merchants are barred from directly passing on the charges, an IIT Bombay report has warned, calling for changes to the proposed model. Business News | UPI MDR May Push Costs Onto Consumers Despite Surcharge Ban: Report.
What happens when merchants pass on UPI MDR costs to customers?
An IIT Bombay study mentions two aftereffects: First, consumers who purchase goods/services for more than ₹2,000 pay a higher price; second, the higher selling prices percolate even to those making purchases of less than ₹2,000
There is no need for a 0.40% MDR fee on UPI payments. It should be only 0.08%, an IIT Bombay report has suggested. This suggestion has been given in a report released by IIT Bombay professor Ashish Das and former RBI officer Pragya Das. It is said that the MDR fee on UPI payments may come into effect in November.
Coverage Details
Bias Distribution
- 100% of the sources lean Right
Factuality
To view factuality data please Upgrade to Premium
