Proposed MDR for UPI transactions will be nominal, says government
The Indian government has clarified that any proposed Merchant Discount Rate (MDR) for UPI transactions will be nominal and limited to specific high-value merchant transactions. Officials emphasized that person-to-person transfers will remain free and denied that the move is a result of pressure from international card networks.
Why it matters
This policy shift aims to ensure the long-term financial sustainability of India's massive digital payment infrastructure while balancing merchant costs and consumer accessibility.
NEW DELHI: The government said on Saturday that the proposed merchant discount rate (MDR) for UPI transactions will be nominal and apply only to a limited set of merchants for transactions above a threshold, while seeking to assure users that all person-to-person transactions will remain free and consumers who make the payment will not face any fees."A vast majority of the transactions will remain free of charge for merchants on UPI. MDR, if introduced, will only be threshold-based and not levied on a blanket basis to all," the statement said, adding that the UPI and Services Steering Committee, headed by NPCI, will decide on the MDR, if any.It also dismissed reports of the charges being imposed under pressure from the US, which was seen to be pushing the case of Visa and Mastercard that levy MDR on credit card and debit card transactions, which are up to 2%,…
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