Business Desk – If you make payments through UPI daily, this news is extremely important for you. The Lok Sabha has passed a bill that allows the government to impose a Merchant Discount Rate (MDR) on certain digital payments if needed in the future. However, this does not mean that UPI will be charged starting today. Currently, UPI remains completely free as before. The government has not decided to levy any new fees on the public.
Will there be a charge for UPI now?
Not at this time. Currently, making payments through UPI remains free for the public. The new law only empowers the government to decide, if needed in the future, which digital payments should be subject to MDR (Merchant Discount Rate) and which should not. This means that currently, no additional charges are levied on your UPI transactions.
What is MDR?
Merchant Discount Rate (MDR) is the fee a bank or payment service provider receives for processing a digital payment. Simply put, when a customer makes a payment through UPI, a card, or other digital means, there’s a cost to completing that transaction. The bank or payment company receives MDR in exchange for this cost.
Why was MDR not charged on UPI until now?
Until now, transactions made through UPI and RuPay Debit Cards had a zero MDR policy. This meant that neither the customer nor the merchant was charged any MDR for this service. This is why UPI rapidly gained popularity in the country, and millions of people began making digital payments without any additional fees.
What will change with the new law?
The new law will empower the government to enact new rules regarding MDR on digital payments if necessary. This means that in the future, if the government wishes, it can impose MDR on certain types of transactions or modify the existing system as needed. However, no such decision has been taken yet.
How much will it impact the common man’s pocket?
At present, there will be no impact. The government has not yet implemented any new charges on UPI. Therefore, ordinary consumers can continue to make payments through UPI without any additional fees.
However, if MDR is implemented on certain transactions in the future, it could impact merchants, banks, payment companies, and, in some cases, even customers. This will entirely depend on the government’s future decisions.
Why did the government make this change?
The government states that digital payments are growing rapidly in the country. Simultaneously, the costs of operating, securing, and continuously improving this entire system are also increasing. Therefore, through the new law, the government will have the option to set regulations as needed to strengthen the digital payment ecosystem in the long term.
Will there be a fee for every UPI payment?
The answer is no right now. The government has not made any decision regarding the imposition of a fee on every UPI transaction. If MDR is implemented in the future, it is possible that it will only apply to certain types of transactions, large payments, or select categories. It is also possible that UPI will remain completely free for small transactions and general customers.
What should UPI users do for now?
Currently, UPI users do not need to make any changes. You can make payments by scanning a QR code or using the UPI app without any additional charges. Until the government issues a separate notification or regulation regarding the implementation of MDR, UPI transactions will remain completely free.