New Delhi, Aug 6: UPI payments are free as of now but these may carry a charge in the near future.
Finance Minister Nirmala Sitharaman has moved a bill in Parliament which provides for amendments to the Payment and Settlement Systems Act.
The amendment opens the door for re-levy of Merchant Discount Rate (MDR) on select UPI transactions as it existed around 6 years back.
The proposal being discussed is — an MDR of 0.3 per cent to 0.5 per cent, applied only on transactions above Rs 2,000, and only for larger merchants crossing a turnover threshold.
Small shopkeepers and everyday consumer transfers are expected to stay untouched.
RBI Governor Sanjay Malhotra, when asked about this at a press conference, said “someone will ave to pay” for the costs of transactions but added that “It is very premature to talk right now”.
Noting that the government is still in the process of carrying out the amendment, he said, “We all want that this public infrastructure should continue to strengthen. Let’s wait and watch for further developments on this….What is important is that we continue to invest and we continue to find the means, whether it is MDR or other things. Let’s wait and see how the situation evolves.”
Since January 2020, banks and payment companies haven’t charged merchants an MDR on UPI transactions as the government stepped in with subsidy. (BVI)
