By ENewsXpress Desk
Indias widely used digital payment system UPI could see a big change. The Central Government is thinking about allowing a fee on UPI transactions for businesses that’re over ₹2,000. This fee is called Merchant Discount Rate or MDR. It could be 0.25% to 0.40% of the transaction amount.. Nothing is final yet. The government is still thinking about it.
What Is the Proposal?
The government wants to change the rules so that banks and payment companies can charge MDR on some payments. They are planning to do this through a law called the Taxation and Other Laws Amendment Bill.
Government officials say this is an idea for now. They have not decided when it will start.
Which Transactions Could Be Affected?
If the government says yes to this proposal then UPI payments for businesses that’re over ₹2,000 might have to pay a fee. This fee could be 0.25% to 0.40% of the transaction amount.. Person-to-person UPI transfers will still be free. You will not have to pay extra when you buy things like groceries or vegetables.
What Is Merchant Discount Rate?
MDR is a fee that businesses pay to banks or payment companies when they accept payments. Now UPI transactions do not have this fee.. With more and more people using UPI the cost of keeping the payment system safe and running is going up. So the government and banks are thinking about bringing back this fee for some transactions.
Why Is the Government Thinking About This?
Experts think that UPI is being used much that it is getting expensive to keep it running safely. The government and banks want to make sure that UPI is sustainable. They think that charging a fee on business transactions could help.
Will You Have to Pay Extra?
The fee will be paid by businesses not by you.. Some businesses might increase their prices to pay for this fee. The government has not made a decision on this yet.
UPI Is Still Growing
The government says that most UPI transactions are under ₹2,000.. The big transactions are a large part of the total value. In July UPI had around 23.7 billion transactions. The total value was around ₹29.9 lakh crore. This shows how important UPI is for Indias economy.
For now there is no charge on UPI payments over ₹2,000. The government is still thinking about it. If they say yes then only big business UPI transactions will be affected. Person-to-person transfers and everyday UPI payments will still be free. UPI payments will keep being easy to use. The government just wants to make sure that UPI is sustainable, for the future.
