Will you have to pay to use UPI? 7 FAQs on possible MDR & what it means for consumers

Will you now have to pay charges for your UPI transactions? That’s the big question that many are asking after the Lok Sabha cleared a Bill amending the Payment and Settlement Systems Act, 2007, enabling the government to authorise banks and other payment service providers to impose charges on transactions carried out through the Unified Payments Interface (UPI) and other electronic payment modes that may be notified.The amendment removes the existing legal restriction that bars banks and payment service providers from collecting Merchant Discount Rate (MDR) on notified electronic payment modes.The Times of India reported that the government is expected to permit a Merchant Discount Rate (MDR) of between 0.25% and 0.4% on UPI transactions above Rs 2,000 made to businesses, while person-to-person payments are likely to remain outside the scope of the proposed levy.The proposal is not expected to affect routine purchases such as milk, vegetables, groceries or payments…