The Centre has clarified that UPI will remain free for consumers, though a nominal MDR may apply to select merchant transactions above a certain threshold once notified by the UPI Steering Committee.
UPI payments will remain free for consumers and the vast majority of merchant transactions, the Centre clarified, seeking to allay concerns over the levy of charges on such transactions following the passage of a Bill to amend the Payment and Settlement Systems Act, 2007.
Nominal MDR may apply to select transactions
The government, however, left the door open for a nominal Merchant Discount Rate, which will be applicable as and when charges are introduced. The finance ministry said in a statement that such charges will apply only to a limited set of merchant transactions, above a certain threshold, at a nominal rate, far lower than debit or credit card MDRs. The clarification comes two days after the Lok Sabha passed a Bill to amend the Payment and Settlement Systems Act, 2007, which authorises the government to permit banks and other service providers to levy charges on payments made through UPI and other notified electronic payment modes.
UPI Steering Committee to decide on rate and threshold
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