Digital payment has become a very important part of everyone's life in India today. From tea stalls to big malls, the use of QR codes and UPI has become common everywhere. But now a big news is coming for crores of UPI users of the country. The government is fully prepared to make a big change in the world of digital payments, which can have a direct impact on your daily transactions.
The path to banks' earnings is clear, will government help stop?
In the recent past, many big and surprising changes have been seen in this world of digital transactions. The government has taken a big decision to impose MDR on large merchant payments. According to the new rules, the merchant discount rate is going to be applicable on select UPI merchant payments above Rs 2,000.
As soon as the earning from MDR starts on big payments, the government has started preparing to completely wrap up its financial assistance and subsidy scheme. Now, along with payment companies, banks will start getting huge transaction based earnings directly from the network. When the entire payment system starts earning money on its own, the government wants to stop the financial help it provides on small payments. According to reports, a provision was made in the budget for the financial year, but no new subsidy has been released since then.
There will be huge savings of taxpayers' money
The biggest reason behind this possible and big decision is to save money of the general public i.e. taxpayers. According to a senior official associated with the banking sector, the main objective of imposing MDR on large payments is that the digital payment ecosystem does not have to depend on taxpayers' money forever.
The government did not at all want any kind of exemption to be given on digital payments made to big businessmen from the hard-earned money of the general public. The officer also clarified that no new subsidy has been given by the government for a long time, which clearly indicates that the government is now taking very strict steps in this direction.
Funds continued to decrease, government pulled out
If we look at the government data of the last few years, it becomes clear that the government had gradually started withdrawing its hand from this scheme. There was a time when thousands of crores of rupees were distributed to banks as UPI incentive, but gradually this figure fell rapidly and became very low.
This huge decline in funds had indicated that the government may soon stop this incentive scheme completely. Now the income from MDR has made this entire process even faster.
Why was this subsidy scheme started?
The government had played a big gamble to bring digital payment revolution across the country. A few years ago, MDR on UPI and RuPay debit card payments was completely reduced to zero. At that time, the government had started this wonderful subsidy scheme only to compensate for the huge losses incurred by the banks due to zero MDR.
Its main objective was to motivate small shopkeepers and common people to adopt digital payments. Apart from this, the main goal of the government was to create a strong infrastructure of secure payments in small towns and rural areas. Today, when the target of digital payment in the country has been achieved to a great extent and the path of banks' own earnings has also become completely clear, then the government has decided to end this subsidy forever.