- Big news for UPI users!
- The debit card rule will be a game changer
- What will be the benefit?
UPI Transaction : Discussions about additional charges or taxes on UPI transactions had arisen. But now these discussions have come to an end. UPI system is gaining popularity in India due to zero transaction fees. But since there is no transaction fee, fintech companies like Google Pay and PhonePay are incurring huge costs, which has led to the demand for merchant discount rates. Due to this case, it was said that now there will be tax or charges on online transactions. But there was confusion about who exactly would be charged. But now the picture is becoming clear. ( UPI Transaction )
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According to sources, a 2017 rule by the Reserve Bank of India, which prohibits merchants from imposing debit card charges on consumers, could be a major option to save Unified Payments Interface (UPI) users from merchant discount rate MDR charges. If RBI's debit card rules are implemented for UPI with minor changes, it could serve as a perfect framework for a balanced fee model without upsetting the public.
What is the rule of RBI?
As per Reserve Bank of India norms, the MDR ceiling on debit cards is very low for small merchants with an annual turnover of less than ₹2 million. This RBI rule protects traders with revenue below ₹2 million from MDR. By using UPI, small grocery shops or street vendors can get exemption from MDR charges.
As per debit card norms, banks charge higher MDR from large showrooms, malls and e-commerce companies. If this rule is implemented, only large organized retailers and traders should be charged lower MDR, as they are more likely to bear the cost themselves.
Relief for common people
With the implementation of this rule, transferring money from one bank account to another bank account will be 100% free for general customers. It will also generate revenue for NPCI and fintech companies, which they can use to further strengthen their servers and security infrastructure. Currently, the government has to provide billions of rupees in stimulus funds to companies to compensate for the losses.
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