Government Proposes MDR on UPI Transactions Above ₹2,000
Summary
- The government has proposed a Merchant Discount Rate (MDR) of 0.25-0.5% on UPI transactions above ₹2,000.
- This move reverses a decade-long policy of not charging MDR on UPI transactions.
- The proposal could impact the incentives for banks and fintechs to invest in UPI.
- The change in policy may undermine UPI's role in financial inclusion, formalisation, and digital adoption.
Key Facts
- · MDR of 0.25-0.5% proposed on UPI transactions above ₹2,000
- · Reversal of decade-long policy
- · Impact on incentives for banks and fintechs to invest in UPI
- · Potential undermining of UPI's role in financial inclusion
Why it matters
The proposal could have significant implications for the growth and adoption of digital payment systems in India, particularly among small merchants and low-income households.
#UPI#MDR#Digital Payments#Financial Inclusion#Economy