Fee on UPI transactions: Will your payments get costlier? What consumers need to know
The potential reintroduction of Merchant Discount Rates (MDR) on certain UPI transactions in India has sparked concerns about costs for small merchants. While the government has exempted small transactions, larger retailers may absorb the fees, potentially impacting their profit margins.
Why it matters
As UPI is a primary payment method in India, changes to its fee structure could influence consumer behavior and the financial viability of small businesses.
MUMBAI: Will the reintroduction of MDR on select UPI transactions impact you in any way? Well, a lot will depend on individual retailers, even though the government has kept consumers beyond the ambit of the framework. MDR is charged to merchants by banks and payment networks for processing digital transactions.Many of the large merchants such as big retail chains and restaurants are likely to absorb the cost in a competitive market instead of passing it on to consumers, industry executives said. Their margins, however, will get impacted and that too at a time when profitability is already under pressure on the back of considerable commodity inflation.“Large retailers can afford to bear the cost and the overall business impact for them should not be much. Credit cards always carried a charge.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in