Digital payments have made everyday transactions much easier. People no longer need to carry cash everywhere, as UPI has become the preferred payment method for millions.
If you regularly use UPI, there may be an important change coming soon.
According to sources, the central government is considering bringing back the Merchant Discount Rate (MDR) on UPI merchant transactions worth ₹2,000 or more.
The proposal is currently under consideration, and a final decision is expected within the next month.
Who Will Be Affected?
If the proposal is approved, the MDR charge is expected to apply only to large businesses. Traders and business owners with an annual turnover of up to ₹1.5 crore may be exempt from paying this fee.
This means that small businesses are likely to remain outside the scope of the proposed charge, while larger merchants could be required to pay MDR on eligible UPI transactions.
What Is Merchant Discount Rate (MDR)?
Merchant Discount Rate (MDR) is a fee that merchants pay to banks or payment service providers when they accept digital payments. The fee helps cover the costs of operating and maintaining the digital payment infrastructure.
According to the information available, the government is considering imposing an MDR of 0.5% on UPI transactions of ₹2,000 or more made to large businesses.
Will Common UPI Users Have to Pay?
The proposed MDR will not be charged to customers. It will apply only to merchants, as per the applicable rules.
For ordinary UPI users, there is expected to be no additional charge for making payments, even if the transaction amount is above ₹2,000.
In other words, sending money through UPI will continue to remain free for customers under the current proposal.