Digital payments have made everyday transactions much easier. People no longer need to carry cash everywhere, as UPI has become one of the most widely used payment methods in India.
If you use UPI, this update is important for you because the government is considering a major change for certain UPI transactions.
Government May Bring Back MDR on Large UPI Transactions
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 biggest question is who this charge will apply to. Reports suggest that the proposed MDR will mainly affect large businesses, while small traders may continue to remain exempt.
The government is expected to take a final decision on this proposal within the next one month.
Small Businesses May Get an Exemption
Under the proposal, traders and businesses with an annual turnover of up to ₹1.5 crore may not have to pay the MDR charge.
This means the proposed fee is likely to apply only to businesses with a turnover above this limit.
What Is Merchant Discount Rate (MDR)?
Merchant Discount Rate (MDR) is the fee that merchants pay to banks or payment service providers whenever they accept digital payments. The fee helps cover the cost of processing, operating, and maintaining the digital payment system.
According to the information available, the government is considering imposing an MDR of 0.5% on UPI merchant transactions of ₹2,000 or more made at large businesses.
Will Customers Have to Pay Any Extra Charges?
Many people are wondering whether this proposed change will increase the cost of making UPI payments. As of now, the answer is no.
The proposed MDR would be charged to merchants, not customers. Ordinary UPI users will not have to pay any additional fee for making payments above ₹2,000.
In other words, sending money through UPI will continue to remain free for customers, just as it is now.
