Will UPI No Longer Be Free? Proposed MDR on Payments Above Rs 2000 Explained in 5 Points

Mutual funds and distributors fret over fee on UPI transactions

The government has recently proposed levying a nominal merchant discount rate (MDR) on a limited set of UPI merchant transactions above a certain threshold

Someone has to pay for UPI. How do we decide who?

The fee alters the ease with which that money is used. A part of money’s usefulness lies precisely in its trivial transaction cost

Will UPI no longer be free? Proposed MDR on payments above Rs 2000 explained in 5 points

UPI payments could see a major change if the government's proposed amendments pave the way for merchant charges on high-value transactions. A Merchant Discount Rate (MDR) of 0.3 to 0.5 per cent is reportedly being considered for payments above Rs 2,000 made to larger merchants.

payment and settlement systems act amendment: UPI transactions above Rs 2000 to attract MDR after debit, credit cards? Here’s what users need to know about the proposal

While there has been no official word from the government on this yet, it is learnt that the Centre could allow a levy of 0.25% to 0.4% as merchant discount rate (MDR) charges on UPI transactions above Rs 2000. So, does this mean that the proposal will directly impact you? First understand what MDR is.

Indian Government clarifies UPI will remain free for citizens; Any future MDR will be nominal and will apply only to a limited set of merchant transactions

Recently, it was revealed that the Lok Sabha has passed a Bill proposing an amendment to the Payment and Settlement Act (PSS Act), which authorises the government to permit banks and other service providers to levy charges on payments through UPI and other notified electronic payment modes. This news was widely spread online, with some users and media reports speculating that the government is planning to impose fees on all UPI transactions. Wel…