Govt Plans Levying MDR On UPI Transactions Over INR 3,000: Report

The Indian government is reportedly considering a proposal to levy a Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions that are valued above Rs 3,000. Currently, UPI transactions are free for both consumers and merchants, a policy that has been instrumental in driving its widespread adoption. However, the lack of a revenue model has put a financial strain on the banks and payment service providers that operate the UPI infrastructure. The proposal suggests introducing a small fee, the MDR, which would be borne by the merchant for high-value transactions. This move aims to create a sustainable revenue stream to support the continued growth and maintenance of the UPI ecosystem. While it could make high-value digital payments slightly more expensive for merchants, it is seen as a necessary step to ensure the long-term viability of India's flagship digital payments platform.