New Delhi. The protest against the government's decision to impose Merchant Discount Rate (MDR) on UPI transactions has reached the Supreme Court. Advocate Anjan Dutta has filed a petition in the Supreme Court demanding cancellation of the gadget notifications issued by the Finance Ministry on September 14 and 15, in which it has been said that charge will be imposed on commercial UPI transactions of more than Rs 2000. The petitioner says that this will ultimately affect the common citizens as well. Whereas according to PTI, a top government official gave a clear answer on the possibility of withdrawal of MDR and said that this decision has been taken and now there is no question of reversing it.
While clarifying the position on UPI MDR transaction charge, Union Communications Minister Jyotiraditya Scindia said that under the leadership of Prime Minister Narendra Modi, UPI has been established as the most successful and transparent payment system not only in India but also in the world and profitable for every customer. The UPI system today processes payments worth ₹30 lakh crore every month. Transactions worth about $3.5 trillion are taking place through UPI in a year. To keep this system ongoing, every year's revenue expenditure is being spent from the funds of the Government of India i.e. the general tax payer. When a technology or system is fully established, it should stand on its own feet. With this in mind, MDR (Merchant Discount Rate) of 0.4% has been implemented on the UPI system.
Scindia said that if we talk about credit cards, the cost per transaction is usually between 1.5% to 2.5%, whereas for debit cards it is around 0.9%. In contrast, the cost structure decided by the Government of India in collaboration with RBI for UPI is 0.4% and that too as per strict rules. The rule is that if the transaction of a common customer or consumer is up to Rs 2,000, the MDR charge will be zero. Today, 96% of all UPI transactions are for amounts less than Rs 2,000. This means that this cost will be applicable only on 4 percent of the transactions. Let us tell you that many opposition leaders including Rahul Gandhi are demanding withdrawal of MDR and are targeting the government.