'MDR to boost UPI use in cross border payments': JP Morgan Global Payments co-head
JP Morgan Global Payments co-head Max Neukirchen stated that introducing merchant discount rates on UPI transactions could drive its adoption in cross-border payments. He noted that despite fees, UPI remains a cheaper alternative to traditional card payments and cash handling.
Why it matters
Expanding domestic instant payment networks into cross-border financial infrastructure represents a major evolution in global digital commerce and treasury operations.
MUMBAI: The introduction of merchant fees on UPI transactions could help expand its use in cross-border payments by giving merchants an alternative that remains cheaper than cards and cash, said Max Neukirchen, co-head of JP Morgan Global Payments.Neukirchen said the cross-border use case for UPI could benefit from the introduction of a merchant discount rate (MDR) on person-to-merchant payments as this incentivises intermediaries. "Fast-payment systems such as UPI started as domestic solutions. They now exist in dozens of countries, including all the major economies. The next big step is cross-border faster payments," he said.While acknowledging that charging fees on UPI is a "thorny topic", Neukirchen said the proposed charges would remain competitive. "Where the 40-basis-point charge applies, it is still cheaper than most alternatives. Card payments cost more.
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