UPI Payment New Rules: The Modi government, which has been promoting online transactions, is now going to use it as a means to fill the government coffers. Yes… the Modi government is going to amend the UPI payment rules. Under this, a charge will be levied on UPI transactions of Rs 2000 and above. The Modi government has introduced a new bill in Parliament, under which the MDR charge is being withdrawn. Under this, a charge will have to be paid on payments above Rs 2000.
The Ministry of Finance has introduced the Payment and Settlement Systems (Amendment) Bill, 2027 in Parliament. This bill proposes to introduce a Merchant Discount Rate (MDR). This charge could apply to transactions exceeding ₹2,000. This means that individuals will have to pay the MDR.
However, the comforting thing is that this will not be applicable to everyone. It will not affect common users. This charge will be levied only on people associated with big businesses. It is unlikely to affect everyday purchases like milk, vegetables, groceries and auto rickshaw and taxi fares. According to media reports, this proposal mainly targets merchant transactions of more than ₹2,000 and large commercial establishments. Consumer-to-consumer transactions will be exempted from this. Even if you make a payment of more than ₹2000, you will not have to pay any charge. The general UPI limit is ₹1 lakh per day and in some special categories (like hospital, education, tax) payments can be made up to a much higher limit.
The rule will be applicable on these users.
This mainly affects banks, UPI service providers, merchant payment ecosystem, merchants accepting small payments through BHIM-UPI, because incentives are given on the basis of these transactions. According to a statistic, 95 percent of the transactions are below the limit of Rs 2000. Only 5 percent of the transactions are more than Rs 2000. This means that this charge will be applicable only on these 5 percent of merchant transactions.
According to the report, the proposed fee could range from 0.25% to 0.4% for business transactions above ₹2,000, and a fee of 25-30 basis points is also being discussed. A timeline for implementation has not yet been finalized .
What is MDR charge?
MDR is a fee that businesses pay to banks and payment service providers for conducting digital transactions. Therefore, any charges will apply to merchants, not consumers using UPI. This rule was scheduled to take effect in January 2020. However, the Modi government had previously barred banks and payment service providers from charging MDR on UPI and RuPay debit card transactions to promote digital payments.
Congress took aim
Congress has targeted this government scheme. The Congress wrote on social media, “Modi has hatched a plan to cut your pockets. Soon, you may be extorted for UPI payments of more than ₹2,000.” People are already suffering from inflation, but Narendra Modi doesn’t care. He wants to squeeze every penny out of you by introducing new schemes. Modi’s strategy is clear: let the public die, let the extortion continue.”