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UPI Charges: A big information has come to light regarding UPI, which has become the largest means of digital payment in India. Let us tell you that if you use Google Pay, PhonePe, Paytm or any other UPI app for everyday shopping, then some changes are going to come in it. It is being said that the government is considering the possibility of re-imposing MDR (Merchant Discount Rate) charges on UPI, but its impact may not be on common consumers but on select big merchants.

Regarding this, it is being said in the reports that the purpose of this step is to make the digital payment system more sustainable and stronger because with the increasing UPI transactions, the costs of banks and fintech companies are also continuously increasing.

What is MDR and why is there talk of its withdrawal?

If we talk about Merchant Discount Rate, it is the fee that the shopkeeper pays to the bank or payment service provider in exchange for accepting digital payments. Let us tell you that in January 2020, to promote UPI, the government had completely abolished this fee. After this, a record increase in digital payments was seen in the country. However, now the demand for partial withdrawal of MDR has intensified in view of the increasing cost of conducting crores of UPI transactions in a secure and seamless manner.

Which merchants may have to pay charges?

Reports also say that the proposed MDR charge can be implemented only on big traders. It is being told that MDR charges up to 0.30% can be imposed only on those traders whose annual turnover is more than Rs 1 crore to Rs 1.5 crore and whose UPI transactions are more than Rs 2,000. This means that almost 90% of small shopkeepers in the country will remain out of this scope and will not have to pay any additional charges for accepting UPI payments.

Will common people also have to pay any charge?

It is also being told in the information that this proposal has no direct relation with the common UPI users. Which means that customers will be able to make free UPI payments like before. MDR will be paid only by the eligible merchant and not by the paying customer. Regarding this, experts believe that free UPI service has played a big role in promoting cashless economy in India. At present, PhonePe and Google Pay have about 79% share in the UPI market. In such a situation, the government can create a new model to keep digital payments strong and manage the costs of payment companies. But no official announcement has been made yet regarding MDR.