The Merchant Discount Rate (MDR) charges on UPI transactions above Rs 2,000 could push small merchants and price-sensitive consumers back towards cash, economic think tank GTRI said on Wednesday.
Effective October 15, UPI payments to merchants (P2M) above Rs 2,000 will attract a 0.4 per cent MDR with an overall cap of Rs 300. Besides, a flat concessional MDR of Rs 5 would be applicable on specific merchant categories such as railways, telecom services, insurance, and fuel for transaction above Rs 2,000.
“MDR could push small merchants and price-sensitive consumers back towards cash,” GTRI Founder Ajay Srivastava said in a social media post.
He said that UPI fees are not about revenue as keeping UPI free costs the government Rs 2,000-2,500 crore annually.
“This is tiny compared with subsidies of Rs 2.03 lakh crore for food, Rs 1.68 lakh crore for fertilisers, Rs 22,800 crore for agricultural credit and Rs 12,500 crore for petroleum and LPG,” he said adding the NPCI (National Payment
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