2 hrs ago
New UPI Merchant Charges Aim to Sustain Digital Payments
UPI is a way people and businesses in India send money instantly.
The number of UPI payments has grown quickly.
A new fee called MDR will apply to some payments made to merchants.
Starting October 15, merchants will pay 0.4% on transactions above Rs 2,000.
Customers will not directly pay this fee.
Payments between two people will remain free.
Small QR-code merchants collecting up to Rs 1 lakh each month will also be exempt.
The fee is intended to help support the long-term operation of the digital payments system.
UPI transaction volume rose 27% to about 145 billion in the reported first half, while value increased 20% to Rs 177 lakh crore.
From October 15, merchants will face a 0.4% MDR on UPI transactions above Rs 2,000.
Person-to-person payments and small QR-code merchants collecting up to Rs 1 lakh monthly are exempt.
The MDR will be paid by merchants, capped at Rs 300 for transactions of Rs 75,000 or more, and shared across UPI participants.
UPI is now accepted in 11 countries, with Uzbekistan the latest addition.
- Who
- Merchants, customers, banks, payment providers, UPI apps and other participants in the UPI ecosystem.
- What
- A 0.4% merchant discount rate will be introduced for qualifying UPI merchant transactions above Rs 2,000.
- Where
- The policy applies to UPI payments in India, while UPI is also accepted in 11 countries.
- When
- The new MDR is scheduled to take effect on October 15; the article also reports transaction data for the first half of a fiscal year.
- Why
- The MDR is intended to create a sustainable revenue framework for the growing digital payments ecosystem.
Key facts
- Reported UPI volume
- About 145 billion transactions in the first half, up 27% from 114 billion in the comparable reported period.
- Reported UPI value
- Rs 177 lakh crore in the first half, up 20% from Rs 148 lakh crore.
- New merchant rate
- 0.4% on UPI merchant transactions above Rs 2,000, effective October 15.
- Maximum MDR
- Rs 300 for transactions of Rs 75,000 or more.
- Exempt merchants
- Small QR-code merchants collecting up to Rs 1 lakh per month.
- Fee distribution
- The article says 40% goes to customers' banks, 30% to payment gateways, 20% to the UPI app and 10% to the sponsoring bank.
- International reach
- UPI is accepted in 11 countries, including India, Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar, Sri Lanka, Cambodia, Greece and Uzbekistan.
Sources
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