Proposal May Allow MDR Charges on Some UPI Payments

The Story in Brief

UPI payments have so far been free for users. The government has introduced an amendment to the Payment and Settlement Systems Act, 2007, which would remove the legal provision requiring zero charges on electronic payments. This could allow banks and UPI companies to charge merchants for certain transactions.

The Economic Times, citing a Times of India report, said the Centre may permit a 0.25% to 0.4% Merchant Discount Rate on business payments above Rs 2,000. It said person-to-person transfers would likely remain exempt. However, the government has not officially confirmed the proposed rate or whether merchants could pass costs to customers.

The Indian Opinion

For ordinary users, the immediate impact remains uncertain because the proposal is not yet a confirmed charge. A merchant fee could help support the cost of running UPI, but passing it directly to customers could reduce the appeal of digital payments. Claims that every UPI payment will become costly are premature. Clear rules on rates, exemptions and customer protection will be important before any change is implemented.

Sources (2): thehindu.com, economictimes.indiatimes.com

This story was synthesised by AI from the 2 sources linked above.

Updated: this story now draws on 2 sources.

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