Now Reading: RBI Governor calls MDR talk premature on digital payments
-
01
RBI Governor calls MDR talk premature on digital payments
RBI Governor Sanjay Malhotra has called discussions on Merchant Discount Rate (MDR) for digital payments 'premature' and urged stakeholders to adopt a wait-and-watch approach. Speaking after the monetary policy review, Malhotra reiterated…
The Story in Brief
RBI Governor Sanjay Malhotra has called discussions on Merchant Discount Rate (MDR) for digital payments 'premature' and urged stakeholders to adopt a wait-and-watch approach. Speaking after the monetary policy review, Malhotra reiterated that the cost of public payment infrastructure must be borne either by taxpayers or through a 'user pays' model via MDR.
The government is currently moving amendments to statutes governing digital payments, which has fueled speculation about MDR's introduction. Malhotra stressed that investment in infrastructure like UPI must continue, while Deputy Governor Rohit Jain noted growth in the e-rupee and the Unified Lending Interface (ULI) platform. Rediff.com reports that 12 states have digitised land records, a key component for ULI success.
The Indian Opinion
The 'user pays' versus 'taxpayer pays' debate is not new, but the RBI governor has rightly flagged a key trade-off: free UPI is not truly free. Yet, the narrative that MDR will kill UPI's adoption is exaggerated. India's payment infrastructure is robust enough to absorb a small charge on high-value merchant transactions. The real test will be the government's amendment to the payment statutes. Will it explicitly exempt small merchants? That number will settle the fairness question.
Source: rediff.com
This story was synthesised by AI from the source linked above.
