UPI Payment New Rule: If you make a payment of more than ₹2,000 through Paytm, PhonePe, Google Pay, or any other UPI app, this news is important for you. The central government has proposed amendments to the Payment and Settlement Systems Act, which could create a legal provision for applying Merchant Discount Rate (MDR) to select UPI transactions in the future.
However, no new fees have been implemented for UPI payments at this time. If Parliament approves this proposal, the government could later issue a separate notification implementing the MDR. According to the proposal, this fee would be collected from eligible merchants, rather than directly from customers.
Will UPI payments above ₹2,000 be charged?
According to reports, a proposal is being discussed between the government and stakeholders, which could impose an MDR of 0.3% to 0.5% on UPI transactions above ₹2,000. However, this proposal is not yet final and no official decision has been made.
Which merchants could the rule apply to?
According to the proposal, MDR could only apply to merchants with annual turnover exceeding ₹1.5 crore. The government is also considering another model in which the fee could be determined based on a merchant’s annual turnover rather than the transaction amount. Furthermore, discussions are underway to set a maximum limit for MDR.
Will customers have to pay extra?
According to the current proposal, MDR would be paid by merchants, not customers. This means that even if this rule is implemented, the fee would not be charged directly to consumers. However, some large merchants may incorporate this additional cost into the price of products or services as part of their business strategy. However, smaller businesses may be excluded from this proposal.
Why does the government want to make this change?
Currently, UPI has a Zero MDR system. This means that merchants are not charged any processing fees for accepting UPI payments. Banks and digital payment companies say that without MDR, it is difficult to expand and maintain digital payment networks. While card payments require merchants to pay processing fees upfront, UPI does not have such a system.
How big is the UPI network in India?
UPI has become the most popular digital payment platform in the country today. According to official data, last month more than 23.7 billion transactions were processed through UPI, with a total value of approximately ₹29.9 lakh crore. According to reports, transactions above ₹2,000 constitute only about 5% of total UPI payments, but they account for about 65% of total transaction value.
What is the current situation?
No MDR has been implemented yet on UPI transactions above ₹2,000. The government has only proposed to create a legal provision that would allow the imposition of a fee through a notification if necessary in the future. The final decision will depend on parliamentary approval and a subsequent government notification.