Now Reading: UPI MDR Decision Pending, Merchants May Face Charges Above Rs 2,000
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UPI MDR Decision Pending, Merchants May Face Charges Above Rs 2,000
Finance Minister Nirmala Sitharaman said any Merchant Discount Rate on UPI would apply to merchants, not customers. She added that no final decision has been taken. The proposed legal change would allow…
The Story in Brief
Finance Minister Nirmala Sitharaman said any Merchant Discount Rate on UPI would apply to merchants, not customers. She added that no final decision has been taken. The proposed legal change would allow the government to notify charges on designated electronic payment systems, but would not itself impose MDR. RBI Governor Sanjay Malhotra said the costs of sustaining payment infrastructure must be paid by someone and called discussions premature.
Reports differ on the Bill’s status. ETBFSI says the UPI steering committee will decide after Parliament passes it, while Business Today reports that the Lok Sabha has already passed it. A proposal under discussion could charge 0.25% to 0.5% on payments above Rs 2,000 by large merchants. Times Now reports that such transactions may account for 5% of volume but 65% of value. UPI has operated under zero MDR since January 2020.
The Indian Opinion
The loudest claims are that UPI users will be charged immediately, or that merchants alone will absorb every rupee. Neither is established. The government has not fixed the rate, threshold, exemptions or start date, while the RBI governor’s warning points to costs reaching the wider economy indirectly. The real test is whether small merchants remain exempt and whether disclosed MDR revenue improves payment security without pushing prices up. Watch the final notification, not speculation around Rs 2,000.
Sources (4): bfsi.economictimes.indiatimes.com, timesnownews.com, businesstoday.in, medianama.com
This story was synthesised by AI from the 4 sources linked above.
Updated: this story now draws on 4 sources.
