If you usually pay through UPI while shopping, there’s good news. The government is working on a plan where people using UPI instead of credit cards will get discounts.
This move aims to boost the use of UPI for payments. As a result, fewer people may choose credit cards. Let’s take a closer look at what’s being planned.
No MDR charges on UPI payments
When you pay with a credit card, there’s a fee of 2–3% known as the Merchant Discount Rate (MDR). This fee isn’t charged when you pay via UPI.
If you use a credit card at a store, the shopkeeper pays this 2–3% charge. Many store owners bear this cost themselves, while others ask customers to pay extra.
So if you use a credit card, you might be told to pay 2–3% more. This extra cost becomes a big amount when the total purchase is large.
How this will benefit you
According to a report by LiveMint, quoting three people familiar with the matter, the Consumer Affairs Ministry is planning a system where UPI users will directly get the benefit.
So, if an item costs ₹100 when paying by credit card, you may only need to pay ₹98 if you pay using UPI.
UPI payments will become more popular
Offering an upfront discount on UPI payments will encourage more people to use it.
As per LiveMint, the Consumer Affairs Ministry plans to talk to various parties about this, such as e-commerce platforms, payment companies, and the National Payments Corporation of India (NPCI). A meeting might take place in June to discuss the idea.
Faster transactions via UPI
From June 16, UPI payments will also become faster. Currently, UPI transactions take around 30 seconds to process.
After the change, it will take only 15 seconds. This means once you pay, the money will quickly reach the shopkeeper’s account.
