No Charges for Merchant Discount Rates Imposed on Transactions Processed via UPI Systems: Finance Minister Announces
The Truth About UPI Transactions in India
Straight Talk on MDR for UPI
The Union Finance Ministry has put an end to the rumors swirling around, stating that no MDR (Merchant Discount Rate) will be levied on UPI transactions[1]. Designed to protect consumers and promote a cashless economy, the government's stance aims to dispel any unnecessary concerns and uncertainties among the citizens[2].
Fact-Check: The Myth About MDR for UPI
These misconceptions stemmed from rumors circulating on social media about the government planning to impose MDR on larger UPI transactions[3]. The ministry, with a clear stand against such speculations, emphasized that such claims are entirely false, baseless, and misleading[2].
UPI Transactions on the Rise
The National Payments Corporation of India (NPCI) reports a 23% increase in UPI transactions in May, compared to the same time last year[4]. The surge in transactions reached an astounding Rs 25.14 lakh crore in May[4], setting a record high.
The Fine Print
However, recent reports propose that the government might reinforce MDR for high-value UPI transactions, with stakeholders suggesting a 0.3% MDR for large merchants, leaving small transactions untouched[5]. But these discussions and proposals remain confined to industry circles with no official changes made yet.
In essence, while the Finance Ministry's stance negates the immediate likelihood of MDR for UPI transactions, industry discussions hint at potential future considerations for larger UPI transactions to offset infrastructure costs[5]. Keep an eye out for any official policy changes in the future.
The ongoing discussions within the business and technology sectors hint at potential future MDR (Merchant Discount Rate) for high-value UPI transactions[5], as a means to offset infrastructure costs. Despite the Union Finance Ministry's current stance that no MDR will be levied on UPI transactions[1,2], it is essential to stay informed about any changes in the finance landscape.
