New Delhi, November 10 (IANS). Merchants are awaiting the revised date from the National Payments Corporation of India (NPCI) on implementing merchant discount rate (MDR) charges on select person-to-merchant (P2M) Unified Payments Interface (UPI) transactions.
NPCI had postponed the process of implementing MDR charges from the previously scheduled date of October 15 to avoid additional transaction costs during the festive season.
With the festival of Diwali coming to an end and Bhai Dooj on November 11, traders and customers are now waiting for clarity on the date of its implementation.
The UPI and Services Steering Committee had decided that the MDR charge on UPI transactions will be implemented immediately after Diwali. However, the exact date of its coming into effect will be notified separately.
According to the FAQ issued by NPCI, 0.4 percent MDR charge will be applicable on eligible P2M UPI transactions above Rs 2,000. However, on transactions of Rs 75,000 or more, this fee will be limited to a maximum of Rs 300.
For example, if a merchant receives a payment of Rs 1 lakh through UPI, he would have to pay a fee of Rs 400 at the rate of 0.4 percent if there is no prescribed maximum limit. However, due to the cap the MDR fee will be limited to Rs 300 only.
For certain categories of merchants, including railways, telecom services, insurance and fuel, a concessional one-time MDR charge of Rs 5 per transaction will be applicable instead of the normal percentage-based rate on payments above Rs 2,000.
A concessional MDR rate of 0.02 per cent will be applicable on capital market related transactions. This includes payments made to mutual funds, securities, stock brokers and dealers. However, a maximum limit of Rs 300 will be applicable on this also.
MDR is a merchant transaction fee that must be paid by the merchant receiving the money. This will not affect the customer paying through UPI.
NPCI has also clarified that money transfers via UPI between individuals will remain free as before, as the proposed MDR charge will not be applicable on person-to-person (P2P) UPI transactions.
–IANS
abs