NPCI and Banks Discuss Potential MDR Reintroduction for UPI Transactions
· Business · Moneycontrol
The National Payments Corporation of India and various banking stakeholders are evaluating the potential reintroduction of Merchant Discount Rate on UPI transactions. Currently, UPI payments remain free for consumers and merchants, a policy maintained to encourage digital adoption across India. Discussions are centered on how to distribute transaction fees between banks, payment service providers, and the NPCI if a fee structure is implemented. No final decision has been reached regarding the timeline or the specific percentage of the proposed charges. The move aims to address the rising operational costs associated with maintaining high-volume digital payment infrastructure.
Why it matters
The reintroduction of MDR could impact the profitability of fintech companies and banks while potentially increasing costs for small and medium-sized merchants who currently process UPI payments at no charge.
Read the original report — Moneycontrol
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