Quick Summary
The government is set to closely monitor the implementation ofMerchant Discount Rate (MDR) charges on certain UPI transactions, with a focus on ensuring that the additional cost does not ultimately reach consumers. The new MDR framework will apply to selected person-to-merchant (P2M) UPI transactions above 2,000. While the changes introduce charges for certain merchant payments, person-to-person (P2P) UPI transfers will continue to remain free. Officials are also expected to engage with banks,
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FAQ :
MDR charges will apply to specific person-to-merchant (P2M) UPI transactions above Rs 2,000, with a rate of 0.4%. Certain essential categories like fuel may have a flat charge of Rs 5.
No, person-to-person (P2P) UPI transfers will continue to remain free of charge.
No, the vast majority of everyday UPI payments are expected to remain unaffected. Only specific P2M transactions above Rs 2,000 and certain essential categories will attract MDR.
The government's primary concern is that merchants might try to pass on the additional payment-processing costs to consumers, leading to extra charges for them.
Government estimates suggest that around 96% of merchant UPI transactions will remain unaffected by the revised MDR framework.
No, UPI is not becoming chargeable across the board. P2P payments remain free, and a large majority of merchant transactions will also be outside the MDR framework.
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